A bankruptcy judge handed Mesaba Airlines a court victory Thursday, ordering Northwest Airlines Corp. to pay its regional partner $5.2 million for flight services.
U.S. Bankruptcy Judge Gregory Kishel in Minneapolis also ruled that Northwest cannot withhold additional payments due Mesaba during the first 60 days of the smaller airline's bankruptcy case.
Northwest was scheduled to make its next payment to Mesaba by Monday. Mesaba, a subsidiary of MAIR Holdings Inc., feared Northwest could withhold $10.9 million by mid-December.
Northwest filed for bankruptcy Sept. 14 in New York, and Mesaba entered bankruptcy Oct. 13 in Minnesota, largely because of payments Northwest missed in the days leading up to its Chapter 11 filing.
Northwest also is reducing Mesaba's Avro and Saab fleet and has suspended delivery of new jets.
Mesaba sued Northwest on Monday. Executives at the regional carrier decided to withhold subleasing aircraft payments to Northwest from the date of its bankruptcy filing through Dec. 12.
Northwest responded by reducing payments it owed Mesaba for flying passengers to and from its hubs. The judge's ruling barred Northwest from reducing its payments to its regional partner.
In a statement, Northwest said, "We felt that we were exercising our rights within the bankruptcy law. We are disappointed in the ruling and are reviewing our options," the Star Tribune newspaper reported Thursday on its Web site.
The judge said Mesaba was merely exercising the same rights Northwest had used to defer lease payments for the first 60 days of its bankruptcy case. He found Mesaba's argument that Northwest's actions were causing "irreparable harm" by draining the smaller carrier's cash to be persuasive.
News stories provided by third parties are not edited by "Site Publication" staff. For suggestions and comments, please click the Contact link at the bottom of this page.
