Delta Air Lines Inc. emerged today from chapter 11 protection a year ahead of schedule after a 19-month restructuring, the Wall Street Journal reported today. Delta entered chapter 11 on Sept. 14, 2005, amid high fuel prices and the burdens of high labor and pension expenses. While under court protection, Delta slashed its labor and pension costs and the airline said the restructuring has resulted in annual cost savings of $3 billion. As part of today’s move, existing shares of Delta stock will be canceled and current Delta shareholders will not receive any compensation for their positions, the airline said. Shares of the new stock will start trading on the New York Stock Exchange Thursday under the DAL symbol and will be issued to creditors and some employees. Delta’s reorganization plan will give unsecured creditors a percentage of the value of their allowed claims as shares of new Delta stock. Delta employees will get a lump-sum cash payment from the airline, based on a percentage of their salary, and will receive an equity stake in the reorganized company.
A Deutsche Bank subsidiary that bought mortgage loans from New Century Financial Corp. has become the third company to file a lawsuit against the bankrupt lender, alleging it violated a purchase contract, Bankruptcy Law360 reported yesterday. DB Structured Products Inc. struck two repurchase agreements with New Century, one in September 2005 and one in April 2006, the company said in its complaint, filed on Wednesday. The accords stated that DBSP would purchase mortgage loans from New Century, and that the lender would buy them back for a higher price. As a result, DBSP currently owns hundreds of millions of dollars worth of mortgage loans. The complaint also claimed that New Century told DBSP that about 235 mortgage loans were not properly transferred to their new owner, and refused to hand over documents about the loans while still collecting funds from them.
The debtor is required to provide to the trustee, his or her most recent federal tax return. This item has become more difficult than providing the pay advices. Many people do not file taxes, although they are required to do so. Other people do not have to file taxes and we have to prepare an affidavit to that effect. The IRS has provided a fax number where you can fax a tax transcript submittal requests. This often takes a long time for the IRS to respond. Unfortunately, there are certain cases where we cannot wait for the tax transcript. Further, if there is a pending sale date, or a significant garnishment, we must file the case and hope that the debtor will provide that tax return in time so that the case is not dismissed.
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