Tuesday December 19, 2:45 PM E= Delta Files Reorganization Plan =0A=0A =0A=0ATuesday December 19, 2:45 PM E= ST =0A=0A=0AATLANTA (AP) =97 Delta Air Lines Inc. filed a reorganization pl= an Tuesday that calls for it to emerge from bankruptcy next spring as a sta= ndalone company worth as much as $12 billion, which would be more than the = market value of the nation's two biggest carriers combined. =0AThe Atlanta-= based company also said that its board has formally rejected US Airways' $8= .3 billion hostile takeover bid, and its executives joined rank-and-file em= ployees on a full-scale public relations assault against the proposal. =0A"= US Airways is the worst of all potential merger partners," Delta Chief Exec= utive Gerald Grinstein said during a conference call with analysts. =0ADelt= a outlined a five-year business plan, and said that its advisers have deter= mined that a reorganized Delta will have a consolidated equity value of rou= ghly $9.4 billion to $12 billion. It said the plan would result in a recove= ry by Delta's unsecured creditors of roughly 63 percent to 80 percent of th= eir allowed claims. =0A=0AThe high end of the equity value Delta is project= ing would be more than the $11.6 billion in combined market value of AMR Co= rp.'s American Airlines and UAL Corp.'s United Airlines. =0ADelta's existin= g stock would be wiped out under the plan and creditors generally would rec= eive distributions of new Delta common stock to settle their claims. Delta = so far has not decided whether to give creditors any cash. =0AUS Airways' o= ffer included $4 billion in cash and 78.5 million shares of US Airways stoc= k. =0ATempe, Ariz.-based US Airways Group Inc. issued a statement saying it= remains committed to its merger proposal, and it added it believes its pro= posal, including $1.65 billion in cost savings it anticipates, provides mor= e value than Delta's plan. =0A"We remain a disciplined and determined bidde= r for Delta," US Airways Chief Executive Doug Parker said. =0ACreditors mus= t now vote on whether to approve Delta's reorganization plan or any competi= ng plan that may be filed with the court. The plan also must be approved by= the court. =0ATypically, in each class of creditors Delta's plan would hav= e to be approved by holders of two-thirds of the claims and a majority of t= he number of individual creditors, said New York bankruptcy lawyer William = Rochelle. If a class is not impaired =97 that is, if they are guaranteed of= getting all of their money back no matter what =97 they generally don't ge= t to vote, Rochelle said. =0AIf one or more classes of creditors do not app= rove the plan, Delta could still confirm the plan through a cramdown, a man= euver in which it must show the court that the dissenting class will receiv= e more under the plan than it would under a Chapter 7 liquidation, Rochelle= said. The company also would have to show that any subordinate class, such= as shareholders, would get nothing in the way of recovery under the reorga= nization plan, Rochelle said. =0ADelta already has met that second test bec= ause its plan calls for current shares of the company to be wiped out. =0AI= f a competing plan were filed, creditors would vote on each individually. T= here have been bankruptcy cases where two competing reorganization plans we= re approved by creditors; in such a case, a judge decides which plan is con= firmed after holding a hearing to determine which plan is in the "better in= terest" of the creditors. =0A"Bankruptcy is like anything else," Rochelle s= aid. "Money talks at the end of the day." =0AUltimately, the unsecured cred= itors committee in the bankruptcy case will play a key role in determining = Delta's fate. The committee has not said whether it will support Delta's pl= an, US Airways' plan or any other offer to buy Delta that may come in. A la= wyer for the committee, Daniel Golden, did not immediately return a call Tu= esday seeking comment. Rochelle said Delta would likely wait to hear from t= he creditors committee about its views before soliciting votes on its plan.= =0ADelta also said Tuesday that its board has unanimously rejected US Airw= ays' unsolicited offer, disclosed Nov. 15. Delta employees held rallies at = airports serving several cities, including Cincinnati, Boston and Columbia,= S.C., protesting US Airways' bid; Delta executives attended a similar rall= y in Atlanta. Executives also issued strong statements against the merger p= roposal and held several conference calls with analysts to back up their be= lief that the US Airways offer won't work. =0AAn official with knowledge of= US Airways' plans who spoke on condition of anonymity because of the sensi= tivity of the talks said Monday that US Airways was willing to increase its= offer if Delta could justify it is worth more. =0ABut Delta said Tuesday i= t believes flying solo is the best proposal for everyone involved. =0A"Thei= r proposal is a bad deal for Delta and its creditors," Grinstein said of US= Airways. =0AUS Airways shares fell 59 cents, or 1.1 percent, to $55.21 in = early afternoon trading Tuesday on the New York Stock Exchange, putting the= value of its bid for Delta at $8.3 billion. =0ADelta said it believes the = US Airways deal is not likely to gain regulatory approval. It also cited as= obstacles: overwhelming labor issues and "flawed economic assumptions." = =0ADelta's chief financial officer, Ed Bastian, said in a conference call w= ith reporters Tuesday that Delta so far has not received buyout bids from a= ny airline other than US Airways. He also said Delta has "not been approach= ed about any other merger proposals." =0ABastian said Delta showed its reor= ganization plan to its creditors committee last week. He would not say how = creditors specifically reacted, but he said he believes the committee will = ultimately support Delta's plan. =0ADelta said US Airways continues to expe= rience significant integration problems with its prior, smaller deal with A= merica West. It believes US Airways is not equipped to simultaneously integ= rate a substantially larger company like Delta. =0ABastian also said that t= he government's pension insurer is expected to give the final go-ahead Wedn= esday to Delta terminating its pilots' pension plan. The termination would = be effective Sept. 2 and would mean the Pension Benefit Guaranty Corp. woul= d take over the pilot pension plan and pay retired pilots a benefit up to a= certain limit. =0AOn other issues, Bastian said Delta is evaluating key as= sets to see how to use them best to drive shareholder value. He did not ela= borate. Delta also is continuing to cut domestic capacity and increase inte= rnational capacity, Bastian said. =0ADelta said its business plan projects,= among other things, a 50 percent reduction in net long-term debt and a ret= urn to profitability in 2007 and an increase in net income, after profit-sh= aring, from roughly $500 million next year to roughly $1.2 billion in 2010.= =0ADelta filed for Chapter 11 in New York in September 2005. =0ADelta said= its reorganization plan calls for rolling its bankruptcy financing of $2.1= billion into a new package that would go into effect when it emerges from = Chapter 11, and it said it has received several proposals with competitive = terms to help it do that. =0ABastian said Tuesday that Delta was not disclo= sing the exact distribution method of resolving claims in the bankruptcy ca= se. For now, he said Delta was proposing a stock distribution in the new co= mpany, but has not determined yet how much if any cash to distribute to cre= ditors. =0AThere has been no decision about who will lead Delta once it eme= rges from bankruptcy, Bastian said. Delta's current chief, Grinstein, has s= aid he plans to leave Delta around the time it exits bankruptcy. Bastian sa= id the decision about Grinstein's replacement would be made later. =0A=97= =97=97 =0AOn the net: =0ADelta Air Lines: http://www.delta.com