VOL. 127 | NO. 64 | Monday, April 02, 2012
Pinnacle Airlines Files Ch. 11 Bankruptcy
By Andy Meek
Pinnacle Airlines CEO Sean Menke told employees via a letter in January that the beleaguered Memphis-based regional air career might have to seek Chapter 11 bankruptcy protection.
On Sunday, April 1, the company did just that, filing a bankruptcy petition in the Southern District of New York, which handles many of the country's biggest bankruptcy reorganization cases.
Pinnacle announced Sunday the bankruptcy filing is part of a turnaround process for the company that includes Pinnacle having received a commitment from Delta Air Lines Inc. for $74.3 million in debtor-in-possession financing.
Pinnacle will use $44.3 million of that amount to pay back a secured promissory note held by Delta. The rest of the money will be used to fund Pinnacle's ongoing operations.
In a statement released Sunday, Menke said Pinnacle intends "to use the Chapter 11 process to reset our financial and operational structure in order to position Pinnacle for viability over the long term."