Exhibit 99.1
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
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:
:
In re: :
:
: Chapter 11 Case No.
DELTA AIR LINES, INC., et al., :
: 05-17923 (pcb)
:
Debtors. : (Jointly Administered)
- - - - - - - - - - - - - - - - - - x
REVISED INTERIM ORDER PURSUANT TO
SECTIONS 105(a) AND 362
OF THE BANKRUPTCY CODE ESTABLISHING
NOTIFICATION PROCEDURES AND APPROVING
RESTRICTIONS ON CERTAIN TRANSFERS OF
CLAIMS AGAINST AND INTERESTS IN THE DEBTORS' ESTATES
Upon the motion dated September 14, 2005 (the "Motion")(1) of Delta Air
Lines, Inc., and those of its subsidiaries that are debtors and debtors in
possession in these proceedings (collectively, the "Debtors"),(2) for an order
(the "Interim Order") pursuant to sections 105(a) and 362 of the Bankruptcy Code
establishing notification procedures and approving restrictions on certain
transfers of claims against and interests in the Debtors' estates, as more fully
described in the Motion; and upon consideration of the Declaration of Edward H.
Bastian in support of the Motion, dated as of September 14, 2005; and the Court
having subject matter jurisdiction to consider the Motion and the
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(1) Unless otherwise defined herein, each capitalized term shall have the
meaning ascribed to it in the Motion.
(2) The Debtors are the following entities: ASA Holdings, Inc.; Comair Holdings,
LLC; Comair, Inc.; Comair Services, Inc.; Crown Rooms, Inc.; DAL Aircraft
Trading, Inc.; DAL Global Services, LLC; DAL Moscow, Inc.; Delta AirElite
Business Jets, Inc.; Delta Air Lines, Inc.; Delta Benefits Management, Inc.;
Delta Connection Academy, Inc.; Delta Corporate Identity, Inc.; Delta Loyalty
Management Services, LLC; Delta Technology, LLC; Delta Ventures III, LLC;
Epsilon Trading, Inc.; Kappa Capital Management, Inc.; and Song, LLC.
relief requested therein pursuant to 28 U.S.C. ss. 1334 and the Standing Order
of Referral of Cases to Bankruptcy Court Judges of the District Court for the
Southern District of New York, dated July 10, 1984 (Ward, Acting C.J.); and
consideration of the Motion and the requested relief being a core proceeding the
Bankruptcy Court can determine pursuant to 28 U.S.C. ss. 157(b)(2); and venue
being proper before this Court pursuant to 28 U.S.C. ss. ss. 1408 and 1409; and
due and proper notice of the Motion having been provided to the Office of the
United States Trustee for the Southern District of New York, those creditors
holding the five largest secured claims against the Debtors' estates and those
creditors holding the thirty largest unsecured claims against the Debtors'
estates, and it appearing that no other or further notice need be provided; and
the relief requested in the Motion being in the best interest of the Debtors and
their estates and creditors; and the Court having reviewed the Motion and having
held a hearing with appearances of parties in interest noted in the transcript
thereof (the "Hearing"); and the Court having determined that the legal and
factual bases set forth in the Motion and at the Hearing establish just cause
for the relief granted herein; and upon all the proceedings had before the Court
and after due deliberation and sufficient cause appearing therefor, it is
FOUND that the Debtors' consolidated net operating loss ("NOL")
carryforwards and tax credit carryforwards are property of the Debtors' estates
and are protected by the automatic stay prescribed in section 362 of the
Bankruptcy Code; and it is further
FOUND that unrestricted trading of claims against and interests in the
Debtors before the Debtors' emergence from chapter 11 could severely limit the
Debtors'
2
ability to utilize their NOL and tax credit carryforwards for U.S. federal
income tax purposes, as set forth in the Motion; and it is further
FOUND that the notification procedures and restrictions on certain
transfers of the common stock of Delta (the "Stock") and Covered Claims (as
defined below) are necessary and proper to preserve the Debtors' NOL and tax
credit carryforwards and are therefore in the best interest of the Debtors,
their estates and their creditors; and it is further
FOUND that the relief requested in the Motion is authorized under
sections 105(a) and 362 of the Bankruptcy Code.
THEREFORE, IT IS:
ORDERED that the Motion is granted; and it is further
ORDERED that until further order of this Court to the contrary, any sale
or other transfer in violation of the procedures set forth below shall be null
and void ab initio as an act in violation of the automatic stay prescribed in
section 362 of the Bankruptcy Code and pursuant to this Court's equitable power
prescribed in section 105(a) of the Bankruptcy Code; and it is further
ORDERED that the following procedures and restrictions are imposed and
approved:
(a) Stock Beneficial Ownership, Acquisition and Disposition.
(1) Notice of Substantial Beneficial Ownership of Stock. Any
person or entity who is or becomes a Beneficial Owner of
at least 7,464,750 shares, which represent approximately
4.75% of the issued and outstanding Stock as of the
Petition Date (a "Substantial Equityholder," which shall
also include the Delta Family Savings Plan, irrespective
of the number of shares of Stock its owns as of the
Petition Date) must, on or before the later of: (A)
fifteen (15) days after the Court's entry of an order
approving these Procedures or (B) ten (10) days after
that person or entity becomes a Substantial
Equityholder,
3
serve on the Debtors and their attorneys a notice
containing the Beneficial Ownership information
substantially in the form of Exhibit C-1 attached to the
Motion.
(2) Advance Notice of Certain Proposed Acquisitions of
Stock. Prior to any person or entity purchasing,
acquiring or otherwise obtaining a Beneficial Ownership
of Stock (including options to acquire Stock) that would
either (i) result in an increase in the amount of Stock
Beneficially Owned by a Substantial Equityholder or (ii)
result in a person or entity becoming a Substantial
Equityholder (a "Stock Acquisition Transaction"), such
person or entity must file with this Court and serve on
the Debtors and their attorneys a notice in the form of
Exhibit C-2 attached to the Motion.
(3) Advance Notice of Certain Proposed Dispositions of
Stock. Prior to any person or entity who is a
Substantial Equityholder selling, exchanging or
otherwise disposing of a Beneficial Ownership of Stock
(including options to acquire Stock) (a "Stock
Disposition Transaction" and together with Stock
Acquisition Transactions, "Stock Transactions") such
person or entity must file with this Court and serve on
the Debtors and their attorneys a notice in the form of
Exhibit C-3 attached to the Motion. This limitation will
not apply to any distributions of Stock from the Delta
Family-Care Savings Plan to beneficiaries under the
Plan.
(4) The Debtors shall have fifteen (15) days after receipt
of any filing described in paragraph (2) or (3) above to
object to the Stock Transaction on the grounds that the
transfer may adversely affect the Debtors' ability to
utilize their NOL and other tax attributes. If the
Debtors file an objection, the Stock Transaction may not
be consummated, and, if consummated in violation of this
Court's order, will not be deemed effective, unless
approved by a final and nonappealable order of this
Court. If the Debtors do not object within the fifteen
(15) day period, the Stock Transaction may proceed
solely as set forth in the notice. Further Stock
Transactions within the scope of paragraph (2) above
must be the subject of additional notices as set forth
herein with an additional fifteen (15) day waiting
period. If the Debtors voluntarily advise the party
proposing to acquire or dispose of Stock, in writing
before the fifteenth day, that they do not object, the
party may proceed to acquire or dispose of the subject
Stock.
(b) Covered Claims, Beneficial Ownership and Acquisition.
(1) Notice of Substantial Beneficial Ownership of Covered
Claims. Any person or entity who is or becomes a
Beneficial Owner of Covered Claims of at least $175
million (such a person or entity, a "Substantial
Claimholder") must, on or before the later of: (A)
fifteen (15) days after the Court's entry of an order
approving these Procedures or (B) ten (10)
4
days after that person or entity becomes a Substantial
Claimholder, serve on the Debtors and their attorneys a
notice containing the Beneficial Ownership information
substantially in the form of Exhibit D-1 attached to the
Motion.
(2) Advance Notice of Certain Acquisitions.
(A) Acquisitions. Subject to paragraph (3) below,
prior to any person or entity purchasing,
acquiring or otherwise obtaining a Beneficial
Ownership of Covered Claims that would either
(i) result in an increase in the amount of
Covered Claims owned by a Substantial
Claimholder or (ii) result in a person or entity
becoming a Substantial Claimholder (a "Covered
Claims Transaction"), such person or entity must
file with this Court and serve on the Debtors
and their attorneys a notice in the form of
Exhibit D-2 attached to the Motion.
(B) The Debtors shall have fifteen (15) days after
receipt of any filing described in paragraph (A)
above to object to the Covered Claims
Transaction. If the Debtors file an objection,
the Covered Claims Transaction may not be
consummated, and, if consummated in violation of
this Court's order, will not be deemed
effective, unless approved by a final and
nonappealable order of this Court. If the
Debtors do not object within the fifteen (15)
day period, the Covered Claims Transaction may
proceed solely as set forth in the notice.
Further Covered Claims Transactions within the
scope of paragraph (A) above must be the subject
of additional notices as set forth herein with
an additional fifteen (15) day waiting period.
If the Debtors voluntarily advise the party
proposing to acquire Covered Claims, in writing
before the fifteenth day, that they do not
object, the party may proceed to acquire the
subject Covered Claims.
(3) Contemporaneous Notice of Certain Acquisitions. A person
or entity shall not be required to provide advance
notice to the Court, or to the Debtors or the Debtors'
attorneys of any transfer of any Covered Claims, where
(A) (i) the transferor is a Substantial Claimholder and
acquired all the Covered Claims being transferred after
the date that is eighteen months prior to the Petition
Date and such claims are not Ordinary Course Claims (as
defined below) continuously held by the transferor and
(ii) the transferee will become a Substantial
Claimholder, but the transferee did not, immediately
before the transfer, hold any Covered Claims that it
acquired after the date that is eighteen months prior to
the Petition Date (other than Ordinary Course Claims
continuously held by the transferee) or (B) the
transferee will acquire the Covered Claims being
transferred pursuant to a foreclosure or other
involuntary transfer from an equity participant or the
lessor in a leveraged lease transaction
5
(both (A) and (B) an "Excepted Transfer"). Instead, the
transferee shall provide written notice to the Debtors
and the Debtors' attorneys within ten (10) days after
the Excepted Transfer, in the form of Exhibit D-3
attached to the Motion.
(c) Definitions. For purposes of this Interim Order:
(1) "Beneficial Ownership" of a Covered Claim or of Stock
shall be determined in accordance with applicable rules
under section 382 of the Internal Revenue Code and thus
shall include, but not be limited to, direct and
indirect ownership (e.g., a holding company would be
considered to Beneficially Own all shares owned or
acquired by its 100% owned subsidiaries), ownership by
members of a person's family and persons acting in
concert and, in certain cases, the creation or issuance
of an option (in any form). Any variation of the term
Beneficial Ownership (e.g., "Beneficially Own") shall
have the same meaning and an "option" to acquire stock
or claims shall include any contingent purchase,
warrant, convertible debt, put, stock subject to risk of
forfeiture, contract to acquire stock or similar
interest, regardless of whether it is contingent or
otherwise not currently exercisable.
(2) A "Covered Claim" shall mean (i) any claim against one
or more Debtors arising prior to the Petition Date or
(ii) a lease under which one or more Debtors are lessees
and that has not been assumed by such Debtor(s). The
amount of any Covered Claim that is a lease shall be the
aggregate amount of lease payments that are or will
become due.
(3) An "Ordinary Course Claim" shall mean a claim that was
incurred by any of the Debtors in connection with the
normal, usual or customary conduct of business,
determined without regard to whether the claim arose
from ordinary operations or capital expenditures of any
Debtor. For example, a claim (other than a claim
acquired for a principal purpose of being exchanged for
stock) arises in the ordinary course of a Debtor's trade
or business if it is trade debt; a tax liability; a
liability arising from a past or present employment
relationship, a past or present business relationship
with a supplier, customer or competitor of the loss
corporation, a tort, a breach of warranty or a breach of
statutory duty; or indebtedness incurred to pay an
expense deductible under I.R.C. ss. 162 or included in
the cost of goods sold. A claim that arises upon the
rejection of a contract or lease pursuant to the title
11 case is treated as arising in the ordinary course of
a Debtor's trade or business if the contract or lease so
arose.
(d) Debtors' Right to Waive. The Debtors may waive, in writing, any
and all restrictions, stays and notification procedures
contained in this Motion.
6
(e) Rule 3001(e) of the Federal Rules of Bankruptcy Procedure. The
application of Rule 3001(e) of the Federal Rules of Bankruptcy
Procedure shall be unaffected by these trading restriction and
notification requirements.
And it is further
ORDERED that within five (5) business days of the entry of this Interim
Order, the Debtors shall send to (i) the Office of the United States Trustee for
the Southern District of New York, (ii) those creditors holding the five largest
secured claims against the Debtors' estates, (iii) those creditors holding the
thirty largest unsecured claims against the Debtors' estates, (iv) all indenture
trustees, owner trustees or transfer agents for the Covered Claims or Stock, as
applicable and (v) the issuers of the tax-exempt bonds, a notice in
substantially the form of Exhibit A attached to the Motion describing the
authorized trading restrictions and notification requirements. Upon receipt of
notice and at least once every three (3) months during the pendency of these
chapter 11 cases, all indenture trustees, owner trustees and transfer agents
shall send the notice to all holders of the Covered Claims of more than $75
million or 3 million shares of Stock, as applicable, registered with the
indenture trustee, owner trustee or transfer agent; provided that, if any
indenture trustee provides the Debtors with the name and addresses of all
holders of the Covered Claims of more than $75 million registered with such
indenture trustee, the Debtors shall deliver such notice to such holders. Any
registered holder shall, in turn, provide the notice to any holder for whose
account the registered holder holds Covered Claims of more than $75 million or 3
million shares of Stock, as applicable. Any such holder shall, in turn, provide
the notice to any person or entity for whom the holder holds Covered Claims of
more than $75 million or 3 million shares of Stock, as applicable. Additionally,
the Debtors propose to post the notice on the Case Information
7
Website, as described in the Case Management Order, for posting of documents in
the Debtors' cases; and it is further
ORDERED that any person or entity or broker or agent acting on such
person's or entity's behalf that sells Covered Claims in the aggregate amount of
$15 million to another person or entity shall provide a copy of this Order to
such purchaser of such Covered Claims or to any broker or agent acting on such
purchaser's behalf. Any person or entity or broker or agent acting on such
person's or entity's behalf that sells an aggregate amount of at least 1 million
shares of Stock (or an option with respect thereto) to another person or entity
(other than pursuant to a transaction consummated on the New York Stock
Exchange) shall provide this Order to such purchaser or to any broker or agent
acting on such purchaser's behalf; and it is further
ORDERED that any objection to the relief requested in the Motion on a
permanent basis must, by 4:00 p.m. (prevailing Eastern Time) on September 30,
2005, be: (i) filed with the Court, One Bowling Green, New York, New York
10004-1408 and (ii) actually received on or before the objection deadline by (a)
the Office of the United States Trustee, 33 Whitehall Street, 21st Floor, New
York, New York 10004, Attn: Greg M. Zipes, Esq., (b) attorneys for the Debtors,
Davis Polk & Wardwell, 450 Lexington Avenue, New York, New York 10017, Attn: D.
Scott Tucker, Esq., (c) attorneys for any official committee then-appointed in
these cases, (d) attorneys to the agent for the Debtors' post-petition lenders,
Weil, Gotshal & Manges LLP, 767 Fifth Avenue, New York, New York 10153, Attn:
George A. Davis and (e) attorneys for American Express Travel Related Services
Company, Inc., Hahn & Hessen LLP, 488 Madison Avenue, New York, New York 10022,
Attn: Jeffrey L. Schwartz and Joshua I. Divack; and it is
8
further
ORDERED that a reply to an Objection may be filed with the Court and
served on or before 12:00 p.m. (prevailing Eastern Time) on the day that is at
least two (2) business days before the date of the applicable hearing; and it is
further
ORDERED that if timely objections are received there shall be a hearing
held on October 6, 2005, at 1:30 p.m. to consider the timely objections to the
Motion; and it is further
ORDERED that if no objections to the Motion are timely filed and served
as set forth herein, the Debtors shall, on or after the Objection Deadline,
submit to the Court a final order substantially in the form of this Interim
Order, which Order shall be submitted and may be entered with no further notice
or opportunity to be heard afforded to any party, and the Motion shall be
approved nunc pro tunc to the date of the commencement of these chapter 11
cases; and it is further
ORDERED that notice of the Motion as provided therein shall be deemed
good and sufficient notice of the Motion; and it is further
ORDERED that the requirements set forth in this Interim Order are in
addition to the requirements of Rule 3001(e) of the Federal Rules of Bankruptcy
Procedure and applicable securities, corporate and other laws, and do not excuse
compliance therewith; and it is further
ORDERED that the requirement under Rule 9013-1(b) of the Local
Bankruptcy Rules for the Southern District of New York for the filing of a
memorandum of law is waived.
9
Dated: September 16, 2005
New York, New York
/s/ Prudence Carter Beatty
------------------------------
UNITED STATES BANKRUPTCY JUDGE
Exhibit A
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
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:
:
In re: :
:
: Chapter 11 Case No.
DELTA AIR LINES, INC., et al., :
: 05-_____ (___)
:
Debtors. : (Jointly Administered)
- - - - - - - - - - - - - - - - - - x
REVISED NOTICE OF ORDER ESTABLISHING
NOTIFICATION PROCEDURES AND
APPROVING RESTRICTIONS ON
CERTAIN TRANSFERS OF CLAIMS AGAINST
AND INTERESTS IN DEBTORS' ESTATES
TO ALL PERSONS OR ENTITIES WITH CLAIMS AGAINST OR EQUITY INTERESTS IN ANY OF THE
DEBTOR ENTITIES LISTED IN THE ATTACHED SCHEDULE A:
PLEASE TAKE NOTICE that on September 14, 2005, the debtor entities
listed in the attached Schedule A (collectively, the "Debtors") commenced cases
under chapter 11 of title 11 of the United States Code (the "Bankruptcy Code").
Upon the commencement of a chapter 11 case, section 362(a) of the Bankruptcy
Code operates as a stay of any act to obtain possession of property of the
Debtors' estates or of property from the Debtors' estates or to exercise control
over property of the Debtors' estates.
PLEASE TAKE FURTHER NOTICE that on September 14, 2005, the Debtors filed
a motion seeking entry of an order pursuant to sections 105(a) and 362 of the
Bankruptcy Code establishing notification procedures and approving restrictions
on certain transfers of claims against and interests in the Debtors and their
estates (the "Motion").
PLEASE TAKE FURTHER NOTICE that on ______________ _____, 200[ ], the
United States Bankruptcy Court for the Southern District of New York (the
"Bankruptcy Court") having jurisdiction over these chapter 11 cases entered an
order (i) finding that the Debtors' net operating loss ("NOL") carryforwards and
tax credit carryforwards are property of the Debtors' estates and are protected
by section 362(a) of the Bankruptcy Code; (ii) finding that unrestricted trading
of the common stock of Delta (the "Stock") and Covered Claims (as defined below)
could severely limit the Debtors' ability to use their NOL and tax credit
carryforwards for U.S. federal income tax purposes and (iii) approving the
procedures (the "Procedures") set forth below to
A-1
preserve the Debtors' NOL and tax credit carryforwards pursuant to sections
105(a) and 362(a) of the Bankruptcy Code (the "Order").
Any sale or other transfer in violation of the Procedures set forth
below shall be null and void ab initio as an act in violation of the automatic
stay under sections 105(a) and 362 of the Bankruptcy Code.
PLEASE TAKE FURTHER NOTICE that the following procedures and
restrictions have been approved by the Bankruptcy Court:
(a) Stock Beneficial Ownership, Acquisition and Disposition.
(1) Notice of Substantial Beneficial Ownership of Stock. Any
person or entity who is or becomes a Beneficial Owner of
at least 7,464,750 shares, which represent approximately
4.75% of the issued and outstanding Stock as of the
Petition Date (a "Substantial Equityholder," which shall
also include the Delta Family Savings Plan, irrespective
of the number of shares of Stock its owns as of the
Petition Date), must, on or before the later of: (A)
fifteen (15) days after the Court's entry of an order
approving these Procedures or (B) ten (10) days after
that person or entity becomes a Substantial
Equityholder, serve on the Debtors and their attorneys a
notice containing the Beneficial Ownership information
substantially in the form of Exhibit C-1 attached to the
Motion.
(2) Advance Notice of Certain Proposed Acquisitions of
Stock. Prior to any person or entity purchasing,
acquiring or otherwise obtaining a Beneficial Ownership
of Stock (including options to acquire Stock) that would
either (i) result in an increase in the amount of Stock
Beneficially Owned by a Substantial Equityholder or (ii)
result in a person or entity becoming a Substantial
Equityholder (a "Stock Acquisition Transaction"), such
person or entity must file with this Court and serve on
the Debtors and their attorneys a notice in the form of
Exhibit C-2 attached to the Motion.
(3) Advance Notice of Certain Proposed Dispositions of
Stock. Prior to any person or entity who is a
Substantial Equityholder selling, exchanging or
otherwise disposing of a Beneficial Ownership of Stock
(including options to acquire Stock) (a "Stock
Disposition Transaction" and together with Stock
Acquisition Transactions, "Stock Transactions") such
person or entity must file with this Court and serve on
the Debtors and their attorneys a notice in the form of
Exhibit C-3 attached to the Motion. This limitation will
not apply to any distributions of Stock from the Delta
Family-Care Savings Plan to beneficiaries under the
Plan.
(4) The Debtors shall have fifteen (15) days after receipt
of any filing described in paragraph (2) or (3) above to
object to the Stock Transaction on the grounds that the
transfer may adversely affect the Debtors' ability to
utilize their NOL and other tax attributes. If the
Debtors file an objection, the Stock
A-2
Transaction may not be consummated, and, if consummated
in violation of this Court's order, will not be deemed
effective, unless approved by a final and nonappealable
order of this Court. If the Debtors do not object within
the fifteen (15) day period, the Stock Transaction may
proceed solely as set forth in the notice. Further Stock
Transactions within the scope of paragraph (2) or (3)
above must be the subject of additional notices as set
forth herein with an additional fifteen (15) day waiting
period. If the Debtors voluntarily advise the party
proposing to acquire or dispose of Stock, in writing
before the fifteenth day, that they do not object, the
party may proceed to acquire or dispose of the subject
Stock.
(b) Covered Claims, Beneficial Ownership and Acquisition.
(1) Notice of Substantial Beneficial Ownership of Covered
Claims. Any person or entity who is or becomes a
Beneficial Owner of Covered Claims in an aggregate
amount of at least $175 million (such a person or
entity, a "Substantial Claimholder") must, on or before
the later of: (A) fifteen (15) days after the Court's
entry of an order approving these Procedures or (B) ten
(10) days after that person or entity becomes a
Substantial Claimholder, serve on the Debtors and their
attorneys a notice containing the Beneficial Ownership
information substantially in the form of Exhibit D-1
attached to the Motion.
(2) Advance Notice of Certain Acquisitions.
(A) Acquisitions. Subject to paragraph (3) below,
prior to any person or entity purchasing,
acquiring or otherwise obtaining a Beneficial
Ownership of Covered Claims that would either
(i) result in an increase in the amount of
Covered Claims owned by a Substantial
Claimholder or (ii) result in a person or entity
becoming a Substantial Claimholder (a "Covered
Claims Transaction"), such person or entity must
file with this Court and serve on the Debtors
and their attorneys a notice in the form of
Exhibit D-2 attached to the Motion.
(B) The Debtors shall have fifteen (15) days after
receipt of any filing described in paragraph (A)
above to object to the Covered Claims
Transaction. If the Debtors file an objection,
the Covered Claims Transaction may not be
consummated, and, if consummated in violation of
this Court's order, will not be deemed
effective, unless approved by a final and
nonappealable order of this Court. If the
Debtors do not object within the fifteen (15)
day period, the Covered Claims Transaction may
proceed solely as set forth in the notice.
Further Covered Claims Transactions within the
scope of
A-3
paragraph (A) above must be the subject of
additional notices as set forth herein with an
additional fifteen (15) day waiting period. If
the Debtors voluntarily advise the party
proposing to acquire Covered Claims, in writing
before the fifteenth day, that they do not
object, the party may proceed to acquire the
subject Covered Claims.
(3) Contemporaneous Notice of Certain Acquisitions. A person
or entity shall not be required to provide advance
notice to the Court, or to the Debtors or the Debtors'
attorneys of any transfer of any Covered Claims, where
(A) (i) the transferor is a Substantial Claimholder and
acquired all the Covered Claims being transferred after
the date that is eighteen months prior to the Petition
Date and such claims are not Ordinary Course Claims (as
defined below) continuously held by the transferor and
(ii) the transferee will become a Substantial
Claimholder, but the transferee did not, immediately
before the transfer, hold any Covered Claims that it
acquired after the date that is eighteen months prior to
the Petition Date (other than Ordinary Course Claims
continuously held by the transferee) or (B) the
transferee will acquire the Covered Claims being
transferred pursuant to a foreclosure or other
involuntary transfer from an equity participant or the
lessor in a leveraged lease transaction (both (A) and
(B) an "Excepted Transfer"). Instead, the transferee
shall provide written notice to the Debtors and the
Debtors' attorneys within ten (10) days after the
Excepted Transfer, in the form of Exhibit D-3 attached
to the Motion.
(c) Definitions. For purposes of this Notice:
(1) "Beneficial Ownership" of a Covered Claim or of Stock
shall be determined in accordance with applicable rules
under section 382 of the Internal Revenue Code and thus
shall include, but not be limited to, direct and
indirect ownership (e.g., a holding company would be
considered to Beneficially Own all shares owned or
acquired by its 100% owned subsidiaries), ownership by
members of a person's family and persons acting in
concert and, in certain cases, the creation or issuance
of an option (in any form). Any variation of the term
Beneficial Ownership (e.g., "Beneficially Own") shall
have the same meaning and an "option" to acquire stock
or claims shall include any contingent purchase,
warrant, convertible debt, put, stock subject to risk of
forfeiture, contract to acquire stock or similar
interest, regardless of whether it is contingent or
otherwise not currently exercisable.
(2) A "Covered Claim" shall mean (i) any claim against one
or more Debtors arising prior to the Petition Date or
(ii) a lease under which one or more Debtors are lessees
and that has not been assumed by such Debtor(s). The
amount of any Covered Claim that is a lease shall be the
aggregate amount of lease payments that are or will
become due.
A-4
(3) An "Ordinary Course Claim" shall mean a claim that was
incurred by any of the Debtors in connection with the
normal, usual or customary conduct of business,
determined without regard to whether the claim arose
from ordinary operations or capital expenditures of any
Debtor. For example, a claim (other than a claim
acquired for a principal purpose of being exchanged for
stock) arises in the ordinary course of a Debtor's trade
or business if it is trade debt; a tax liability; a
liability arising from a past or present employment
relationship, a past or present business relationship
with a supplier, customer or competitor of the loss
corporation, a tort, a breach of warranty or a breach of
statutory duty; or indebtedness incurred to pay an
expense deductible under I.R.C. ss. 162 or included in
the cost of goods sold. A claim that arises upon the
rejection of a contract or lease pursuant to the title
11 case is treated as arising in the ordinary course of
a Debtor's trade or business if the contract or lease so
arose.
(d) Notice Requirements. Upon receipt of this notice and at least
once every three (3) months during the pendency of these chapter
11 cases, all indenture trustees, owner trustees and transfer
agents shall send this notice to all holders of the Covered
Claims of more than $75 million or 3 million shares of Stock, as
applicable, registered with the indenture trustee, owner trustee
or transfer agent; provided that, if any indenture trustee
provides the Debtors with the name and addresses of all holders
of the Covered Claims of more than $75 million registered with
such indenture trustee, the Debtors shall deliver such notice to
such holders. Any registered holder shall, in turn, provide the
notice to any holder for whose account the registered holder
holds Covered Claims of more than $75 million or 3 million
shares of Stock, as applicable. Any such holder shall, in turn,
provide the notice to any person or entity for whom the holder
holds Covered Claims of more than $75 million or 3 million
shares of Stock, as applicable. Any person or entity, or broker
or agent acting on such person's or entity's behalf, that sells
Covered Claims in the aggregate amount of $15 million to another
person or entity shall provide a copy of this notice to such
purchaser of such Covered Claims or to any broker or agent
acting on such purchaser's behalf. Any person or entity, or
broker or agent acting on such person's or entity's behalf, that
sells an aggregate amount of at least 1 million shares of Stock
(or an option with respect thereto) to another person or entity
(other than pursuant to a transaction consummated on the New
York Stock Exchange) shall provide this notice to such purchaser
or to any broker or agent acting on such purchaser's behalf.
(e) Debtors' Right to Waive. The Debtors may waive, in writing, any
and all restrictions, stays and notification procedures
contained in this Motion.
(f) Rule 3001(e) of the Federal Rules of Bankruptcy Procedure. The
application of Rule 3001(e) of the Federal Rules of Bankruptcy
Procedure
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shall be unaffected by these trading restriction and
notification requirements.
FAILURE TO FOLLOW THE PROCEDURES SET FORTH IN THIS NOTICE WILL
CONSTITUTE A VIOLATION OF THE AUTOMATIC STAY PRESCRIBED BY SECTION 362 OF THE
BANKRUPTCY CODE.
ANY PROHIBITED SALE, TRADE OR OTHER TRANSFER OF THE STOCK OR COVERED
CLAIMS IN VIOLATION OF THE ORDER WILL BE NULL AND VOID AB INITIO AND MAY LEAD TO
CONTEMPT, COMPENSATORY DAMAGES, PUNITIVE DAMAGES OR SANCTIONS BEING IMPOSED BY
THE BANKRUPTCY COURT.
PLEASE TAKE FURTHER NOTICE that the deadline to file an objection
("Objection") to the Motion shall be 4:00 p.m. (prevailing Eastern Time) on
_____, __ 200[ ] (the "Objection Deadline"). An Objection shall be considered
timely if it is (i) filed with the Court, One Bowling Green, New York, New York
10004-1408 and (ii) actually received on or before the Objection Deadline by (a)
the Office of the United States Trustee, 33 Whitehall Street, 21st Floor, New
York, New York 10004, Attn: Greg M. Zipes, Esq., (b) attorneys for the Debtors,
Davis Polk & Wardwell, 450 Lexington Avenue, New York, New York 10017, Attn: D.
Scott Tucker, Esq., (c) attorneys for any official committee then-appointed in
these cases, (d) attorneys to the agent for the Debtors' post-petition lenders,
Weil, Gotshal & Manges LLP, 767 Fifth Avenue, New York, New York 10153, Attn:
George A. Davis and (e) attorneys for American Express Travel Related Services
Company, Inc., Hahn & Hessen LLP, 488 Madison Avenue, New York, New York 10022,
Attn: Jeffrey L. Schwartz and Joshua I. Divack.
PLEASE TAKE FURTHER NOTICE that if timely objections are received there
shall be a hearing held on ______________ _____, 200[ ], at ___:___ __.m. to
consider the timely Objections to the Motion.
PLEASE TAKE FURTHER NOTICE that if no Objections are timely filed and
served, as set forth herein, the Debtors shall, on or after the Objection
Deadline, submit to the Court a final order granting the relief requested
herein, which order shall be submitted and may be entered with no further notice
or opportunity to be heard afforded to any party, and the Motion shall be
approved nunc pro tunc to the date of the commencement.
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PLEASE TAKE FURTHER NOTICE that the requirements set forth in this
Notice are in addition to the requirements of Rule 3001(e) of the Federal Rules
of Bankruptcy Procedure and applicable securities, corporate and other laws, and
do not excuse compliance therewith.
Dated: ______________ _____, 200[ ]
New York, New York
DAVIS POLK & WARDWELL
450 Lexington Avenue
New York, New York 10017
Telephone: (212) 450-4000
Facsimile: (212) 450-6539
John Fouhey, Esq. (JF 9006)
Marshall S. Huebner, Esq. (MH 7800)
Benjamin S. Kaminetzky, Esq. (BK 7741)
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Schedule A
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Filing Entities
1. ASA Holdings, Inc.
2. Comair Holdings, LLC
3. Comair, Inc.
4. Comair Services, Inc.
5. Crown Rooms, Inc.
6. DAL Aircraft Trading, Inc.
7. DAL Global Services, LLC
8. DAL Moscow, Inc.
9. Delta AirElite Business Jets, Inc.
10. Delta Air Lines, Inc.
11. Delta Benefits Management, Inc.
12. Delta Connection Academy, Inc.
13. Delta Corporate Identity, Inc.
14. Delta Loyalty Management Services, LLC
15. Delta Technology, LLC
16. Delta Ventures III, LLC
17. Epsilon Trading, Inc.
18. Kappa Capital Management, Inc.
19. Song, LLC
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