Mesa Air Group, the Unsecured Creditor's Committe, and Delta each submitted their position letters today concerning Mesa's motion to assume the 2005 Delta contract under
Section 365 of the Bankruptcy Code.
Mesa and the Creditors submitted a schedule to assume the Delta contract under Bankruptcy Law and have the litigation transferred from the district court (Atlanta) to the bankruptcy court (New York).
As expected, Delta's letter requests that the litigation be resolved in the district courts in Atlanta.
If the litigation is transferred from District Court to Bankruptcy Court then the Creditor's Committee, the Trustee, and the Judge will be the deciders concerning Mesa's assumtion of the contract. Unlike the District Court, they are more interested in what will make Mesa a viable company not in who wronged who first.
Regardless of which court the litigation is tried in, it appears that Mesa has succeeded in forcing the schedule and brought the issue into the forefront. Forcing this issue is probably the primary reason Mesa chose to declare bankruptcy.
There is now pressure on Delta to either settle, have Mesa assume the contract, or have a court injunction turned around, which is rare. Mesa would probably prefer a large settlement as it would provide some sorely needed cash and ease the process of returning the 50 seaters.
The Judge's views on this matter will be a deciding factor in this case if not
the deciding factor.
Here we go...
winglet