Equity Securities Committee requested to oversee Northwest Airlines stockholders' interests.
East Texas Capital Partners LLC has requested that the US Trustee in Northwest Airlines' (OTC Bulletin Board: NWACQ) bankruptcy case appoint an Equity Securities Committee to oversee the airline's common stockholders' interests in that case.
The company said that it was acting on behalf of its principals, who own Northwest Airlines Corporation common stock, and that it had notified the airline and Judge Allan L Gropper of the US Bankruptcy Court for the Southern District of New York.
East Texas Capital Partners also said that it believes that the bankruptcy is, at best, technical and opportunistic in nature, apparently solely motivated by the airline's desire to speed concession talks with its unions and modify certain company financial arrangements, and the company believes that the bankruptcy filing was unnecessary as Northwest had USD1.5bn in unrestricted cash on hand at the time of filing, more than any major airline at the time of their filing, had labour concessions pending from over half its unionised work force at the time, and pension law reform favourable to Northwest was also moving through the US Congress at the time of filing.
The company also mentions the airline's alleged poor disclosure, citing as an example that maintenance and mechanical problems at Northwest had been described by the company as everything "running smoothly".
East Texas Capital Partners has privately estimated that, under certain scenarios apart from potential shareholder specific damage claims, Northwest Airlines' common stockholders could be entitled to as much as US250m or almost USD3 per common share in recovery in any reorganisation. The appointment of a formal Equity Securities committee will assure that common stockholders have a chance of this recovery, the company said.
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|Title Annotation:||East Texas Capital Corp., Northwest Airlines Corp.|
|Publication:||Airline Industry Information|
|Article Type:||Brief Article|
|Date:||Oct 21, 2005|
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