Northwest Airlines Gets Another Examiner

April 12, 2007
Nevins' job in this case is to determine whether Northwest properly evaluated the value of its assets.

An examiner appointed to investigate the Northwest Airlines bankruptcy case resigned one day after a judge approved him, and a second choice was approved on Wednesday.

The appointment of an examiner, not necessarily routine in bankruptcy cases, came at the request of an ad hoc committee of shareholders who claim the airline is worth more than it claims. The ad hoc group of hedge funds has opposed Northwest on a number of matters as the airline moves toward an exit from Chapter 11 bankruptcy protection.

Harvey Tepner, a partner in charge of restructuring at New York-based Compass Advisers LLP, was originally appointed April 5 to be the examiner.

He resigned the next day, according to court papers from the U.S. Trustee, which on Wednesday named another candidate: Richard Nevins, a retired investment banker who was formerly co-head of the restructuring group at Jeffries & Company Inc.

Nevins' job in this case is to determine whether Eagan, Minn.-based Northwest Airlines Corp. properly evaluated the value of its assets. He will not create his own valuation of the business.

Nevins' prior experience includes other restructuring work at Drexel Burnham Lambert and Smith Barney.

Judge Allan Gropper has said the examiner process should not slow down Northwest's bankruptcy exit. The examiner has until May 14 to submit a written report. That is two days before the company will seek court approval of its reorganization plan.

Creditors have until May 7 to vote on the plan.

The ad hoc committee has sought details of whether Northwest has held discussions with other legacy carriers about a possible acquisition or combination. The committee has said a possible merger could support its theory that the company is worth more than it says, leading its members to get some value out of the reorganized company.

Shareholders usually receive nothing. Northwest's plan calls for the cancellation of existing shares.

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