January 28, 2021 – The Court hearing the LATAM Airlines Group S.A. cases has extended the periods during which the Debtors have an exclusive right to file a Chapter 11 Plan, and solicit acceptances thereof, through and including June 30, 2021 and August 23, 2021, respectively [Docket No. 1760]. Absent the requested relief, the Plan filing and solicitation periods are scheduled to expire on January 29, 2021 and March 23, 2021, respectively.
In a motion requesting their second lengthy extension [Docket No. 1609], the COVID-stricken Debtors reported some progress on issues that are within their control (although having to point to "filing of their schedules, establishing a general bar date for filing claims, developing procedures to streamline the claims process…." as evidence of meaningful progress has a "damned by faint praise" feel to it); but the fundamental and persistent issue of an inability to prepare/agree a Plan in advance of operational clarity clearly remains. That gating issue clearly manifested in the relatively long (5-month, following on an earlier 4-month extension) requested extensions by Debtors that remain largely grounded by the pandemic.
The Debtors do, however, suggest that there is some possible movement in the evolution of their fleet strategy (with some contracts now rejected and some aircraft leasing arrangements amended); although the Debtors do not provide detail as to whether that apparent momentum reflects an optimism that the pandemic's end is within sight, a pragmatic realism that deals must get done as the pandemic drags on…or both.
Perhaps more importantly, it is difficult to assess the importance of these efforts; eg the amended leasing arrangement the Debtors cite (with Vermillion Aviation (Two) Limited) predictably having all of its commercial terms redacted (see Docket Nos. 1265 and 1574].
The extension motion explains, “In the approximately three months since this Court entered the Original Exclusivity Order, the Debtors have continued to make substantial progress in stabilizing and maintaining the Debtors’ operations while focusing on putting the Debtors on a path towards a successful reorganization. Notably, the Debtors have successfully closed $2.45 billion in post-petition debtor-in-possession financing after receiving Court approval on September 19, 2020. Further, the Debtors have advanced the determination of their outstanding liabilities by completing the filing of their schedules, establishing a general bar date for filing claims, developing procedures to streamline the claims process and beginning the process of reconciling approximately 4,800 claims filed in advance of that general bar date. The Debtors also have continued to develop and implement their fleet strategy — which is a predicate to any successful plan of reorganization — by further right-sizing their aircraft fleet, negotiating and documenting consensual stipulations with aircraft counterparties to further reduce the Debtors’ operating expenses and seeking approval of long-term lease arrangements. Even with the meaningful progress the Debtors have made toward a successful reorganization of their business, given the remaining steps that must be undertaken for the Debtors in a case of this size and complexity, a further extension of the Exclusivity Periods is warranted.
In the months following the Petition Date, the Debtors have worked to begin laying the foundation for a plan of reorganization. The Court has already approved a number of motions rejecting certain executory contracts and aircraft-related agreements. The Court also has entered orders authorizing the Debtors to assume key commercial agreements with Delta Air Lines, Inc. (ECF No. 1421) and approving the amendment of certain aircraft leasing agreements (ECF No. 1574)."
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The post LATAM Airlines Group S.A. – Court Allows Second lengthy Extension of Exclusive Plan Filing Period (Until June 30, 2021) as COVID Grounds Plan Takeoff appeared first on Daily Bankrupt Company Updates | Bankrupt Company News.