ATA general unsecured creditor objects to plan confirmation, cites unfair rights offering limitation

By Caroline Salls

Pittsburgh, Jan. 26 - ATA Holdings Corp. general unsecured claimant Stanfield Capital Partners LLC objected to ATA's plan of reorganization, saying it does not treat all unsecured creditors equally, according to a Thursday filing with the U.S. Bankruptcy Court for the Southern District of Indiana.

Stanfield also said the plan unfairly limits the right to participate in a rights offering to those creditors who are determined to be qualified claimholders.

The company said creditors who are not considered qualified are excluded from the rights offering, without being granted any consideration in exchange for the forfeited rights.

According to the motion, the plan gives plan proponents, including the company and MatlinPatterson Global Advisers LLC, the right to decide which creditors are qualified holders in connection with the rights offering, but the plan proponents are not bound by any legal standard in making their decision.

In addition, Stanfield said the plan allows MatlinPatterson to acquire any shares not purchased through the rights offering, giving Matlin a vested interest in preventing claimholders from being considered qualified.

ATA's plan confirmation hearing is scheduled for Monday.

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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