Southern Air's disclosure statement approved, plan hearing date set

By Lisa Kerner

Charlotte, N.C., Dec. 18 - Southern Air Holdings, Inc.'s disclosure statement was approved on Tuesday by the U.S. Bankruptcy Court for the District of Delaware, according to an attorney familiar with the case.

The plan confirmation will be held on Feb. 14, the attorney said.

Treatment of creditors

Under the proposed plan

• Holders of allowed administrative claims and allowed priority non-tax claims will be paid in full in cash;

• Holders of allowed priority tax claims will be paid in full in cash on the plan effective date, in quarterly installments over a five-year period or under terms agreed to by the claimant, the debtors and the requisite lenders;

• Holders of other allowed secured claims will receive payment in full in cash, the proceeds of the sale of the collateral assets, the property securing the claim or other distributions under the bankruptcy code or agreed upon by the parties;

• Holders of allowed general unsecured claims will receive a share of creditor cash if each of the classes four through 21 vote in favor of the plan. If any of the classes four through 21 vote to reject the plan, general unsecured claims receive no distribution;

• Holders of allowed claims of $2,000 or more may elect to be treated as convenience claims. Holders of convenience claims will receive cash equal to 25% of the allowed claim;

• Holders of allowed general liability insured litigation claims will be allowed to proceed with the liquidation of the claim;

• Holders of allowed subordinated claims will receive no distribution;

• Preferred equity interests and holdings equity interests will be extinguished on the plan effective date;

• Cargo 360 equity interests, Southern Air equity interests and Air Mobility equity interests will be deemed in full force and effect;

• 21110 LLC, 21111 LLC, 21221 LLC, 21550 LLC, 21576 LLC, 21590 LLC, 21787 LLC, 21832 LLC, 23138 LLC, 46914 LLC, 24067 LLC, CF6-50 LLC Aircraft 21380 LLC and Aircraft 21255 LLC, equity interests will be extinguished, and the assets of 21110 will be distributed to reorganized Southern Air; and

• Intercompany claims will be reinstated to the extent determined appropriate by the debtors or be adjusted, continued or capitalized.

Southern Air, a Norwalk, Conn.-based cargo carrier, filed for bankruptcy on Sept. 28. Its Chapter 11 case number is 12-12690.

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