Delta creditors committee says no guarantee US Airways deal will be reached

ATLANTA — There is no guarantee that US Airways' unsolicited buyout offer of Delta will ever be consummated, but it surely will fall through if the pilots' pension plan at Delta is not terminated, lawyers for Delta's unsecured creditors committee said Tuesday.

The committee, a key player in whether the hostile bid is approved, said in court papers that its consideration of the deal, announced Nov. 15, is still in the early stages, but that US Airways has made clear it would walk away without the pilots' pension being dumped.

"While US Airways' offer is only in the preliminary stages of discussion and it is uncertain whether a merger agreement will ever be reached, one thing is certain: the merger between Delta and US Airways will not proceed if the pilot plan is not terminated," the committee's lawyers wrote.

The remarks were made in a filing in which the committee asked the bankruptcy court to deny a request by some retired Delta pilots to stay the court's earlier approval of the pension termination pending further appeal. A federal district judge Monday upheld the bankruptcy court's approval.

The creditors committee's filing includes an affidavit from US Airways Group Inc. lawyer Timothy Pohl, dated Dec. 5, in which Pohl asserts that the Tempe, Ariz.-based airline's offer for Atlanta-based Delta Air Lines Inc., currently valued at $8.7 billion, "assumes that the pilot plan is being terminated."

Likewise, Delta has said it would not be able to emerge from bankruptcy as a standalone carrier, which is its preference, without the pilot pension being terminated.

Top executives of US Airways spent several hours late last month trying to explain to Delta and the bankrupt carrier's unsecured creditors committee why its offer to buy Delta would be better than Delta's standalone plan. The creditors committee has been weighing its options since then, and it has not said which way it is leaning.

Delta has said repeatedly it is opposed to a merger. It is expected to file its reorganization plan with the court later this month.

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