Mesa Air Group Inc., a regional airline in bankruptcy, won court approval to extend an agreement under which it flies routes for US Airways Group Inc. and is set to submit its restructuring plan for a vote.
U.S. Bankruptcy Judge Martin Glenn in Manhattan said at a hearing today that Mesa could enter into an amended code-share agreement with US Airways. The changes extend the agreement by 39 months and resolve claims between the companies, according to court papers filed Oct. 27.
Mesa, based in Phoenix, filed for bankruptcy in January and is poised to submit its restructuring plan to creditors for a vote. At today’s hearing, Glenn said that after reviewing final changes, he would approve the company’s disclosure statement, which describes the restructuring plan to creditors, clearing the way for voting to begin on the proposal.
Under the plan, Tempe, Arizona-based US Airways is slated to receive 10 percent of new Mesa stock and a $6.8 million note. The US Airways code-share agreement generates about 70 percent of Mesa’s revenue, the company said in a court filing. The agreement was set to expire in June 2012 and will now run to September 2015.
Unsecured creditors with claims of about $2 billion will receive new stock and $43.2 million in new notes, according to court papers. Mesa is scheduled to seek court approval of the bankruptcy plan Jan. 10.
The case is In re Mesa Air Group Inc., 10-10018, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
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