ATA files reorganization plan, to give unsecured creditors equity, seek $100 million new investment

New York, Sept. 30 - ATA Holdings Corp. filed its plan of reorganization with the U.S. Bankruptcy Court for the Southern District of Indiana Friday.

Under the proposed restructuring, unsecured creditors will receive equity in the company.

In addition, ATA will seek to raise $100 million from a new equity investor, on top of the $30 million that Southwest Airlines Co. is investing.

The reorganization includes substantive consolidation of the company.

Secured debt will be repaid in full, mostly by being termed out with new debt.

Treatment of claims is as follows:

* The $140 million ATSB secured loan claim will be repaid with $4.5 million in cash and be reinstated for 100% recovery;

* Secured claims A and B against the aircraft fleet will be paid through new fleet notes A and B for 100% recovery;

* Southwest Airlines' $47 million debtor-in-possession facility will be replaced with a new secured note;

* The company's other DIP facility will be repaid in full in cash;

* General unsecured claims including $293.3 million in notes and a $128.5 million settlement with ALPA pilots will receive common stock in the reorganized company. No recovery is yet estimated;

* Preferred stock and common stock holders will receive nothing.

Southwest will receive series A preferred stock in exchange for its $30 million investment in the company.

In addition, ATA will seek a new investor who will invest $100 million in series B preferred stock.

An auction is expected to be held to select the new investor.

Holders of general unsecured claims will also receive rights to buy series B preferred stock, an offering that is expected to be backstopped.

A hearing to approve the disclosure statement is scheduled for Oct. 28 and objections are due by Oct. 21.

ATA Holdings Corp., ATA Airlines' parent, filed for bankruptcy on Oct. 26, 2004. The Dulles, Va.-based company's Chapter 11 case number is 04-19866.

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