Republic Sells $91M Delta Claim at Half Price

Republic's claim was part of a monetary resolution in a deal under which it agreed to cut back services to Delta.


Republic Airways Holdings Inc. said it sold a $91 million unsecured claim in the bankruptcy case of Delta Air Lines Inc., the third-largest U.S. carrier, to an undisclosed buyer for $44.6 million.

Republic disclosed the sale Monday, the deadline for creditors to vote on a reorganization plan expected to bring Delta out of Chapter 11 bankruptcy. Results of the vote won't be known for several days.

Republic's claim was part of a monetary resolution in a deal under which it agreed to cut back services to Delta.

Republic spokesman Warren Wilkinson couldn't be reached for comment on who bought the claim, or whether the Indianapolis-based carrier already voted on the plan. The sale will close April 11, according to a statement.

The sale is one of many involving Delta claims, as hedge funds and other investors in distressed debt seek to profit from trading in bank debt and claims for services rendered by Delta's business partners.

According to court filings for Delta, Bear Stearns Investment Products Inc. bought about $1.25 billion in claims over the past few months. Other claims buyers included JP Morgan Chase Bank and Strategic Value Master Fund.



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