National Airlines Back in Bankruptcy Court

Attorneys for National Airlines have detailed a $112-million debt-for-equity finance plan in U.S. Bankruptcy Court that is expected to help the Las Vegas airline emerge from bankruptcy in late October.

The financing is subject to documentation that will be filed with the court this week, as well as refinement of agreements with creditors, primarily aircraft lessors.

The next hearing is scheduled for Thursday when Judge Linda Riegle will be asked to issue an order for interim approval of the debtor-in-possession finance package. That’s the first step toward confirmation of a modified plan of reorganization, which should come on Oct. 30.

In breaking down the $112-million finance package, National Airlines attorney Craig Hansen said $57.3-million came from additional conversion of debt and administrative claims to equity, $24.3 million from reduction of employee wages, $18.4 million from new cash equity and $11.4 million from the letter of credit.