Davis Polk advised Delta Air Lines, Inc. (“Delta”) on a comprehensive and integrated global settlement (the “Global Settlement”) to restructure Delta’s codeshare relationship with Republic Airways Holdings (“RAH”) and its subsidiaries (together with RAH, “Republic”) that includes multiple interrelated elements. As part of the Global Settlement, (i) Delta will provide a multiple-draw senior secured super-priority debtor-in-possession term loan to Republic in a maximum aggregate principal amount of $75 million (ii) Republic has amended and assumed its Dual Class and Single Class codeshare flying agreements with Delta, amended and assumed a ground handling agreement, assumed a lease of two slots at La Guardia Airport with Delta and entered into a lease with Delta for 13 additional slots at LaGuardia Airport, (iii) Delta and Republic settled prepetition litigation regarding nonperformance under the codeshare flying agreements and (iv) Delta received a $170 million prepetition general unsecured claim, subject to increase in certain circumstances. The Global Settlement was approved by the Bankruptcy Court overseeing Republic’s chapter 11 proceeding on April 29, 2016. On May 3, 2016, an ad hoc group of Republic equity holders (the “Ad Hoc Group”) appealed the Bankruptcy Court orders, and on May 6, 2016 the District Court denied a motion by the Ad Hoc Group for a temporary restraining order or stay of the orders pending appeal.

Delta operates more than 800 aircraft and serves nearly 180 million customers each year. Delta’s extensive flight network offers service to 58 countries on six continents. Delta Connection carriers offer regional services throughout North America. Republic provides scheduled North American regional passenger services and offers approximately 1,000 daily flights through its codeshare relationships with Delta, American Airlines Group, Inc. and United Continental Holdings. Republic operates as a Delta Connection regional jet carrier through its operating subsidiary, Shuttle America Corporation. Republic filed for Chapter 11 in the Southern District of New York on February 25, 2016. One of the goals of Republic’s Chapter 11 is to restructure its codeshare relationships with its codeshare partners. Delta is the first of Republic’s codeshare partners to do so. 

The Davis Polk insolvency and restructuring team includes partner Marshall S. Huebner and associates Darren S. Klein, Stephen D. Piraino and Jonah A. Peppiatt. The finance team includes partner Jinsoo H. Kim and associates Mayer J. Steinman and Vanessa L. Jackson. The litigation team includes counsel Michael J. Russano and John M. Briggs. All members of the Davis Polk team are based in the New York office.

PJT Partners is serving as Delta’s financial advisor.

Seabury Securities LLC is serving as Republic’s financial advisor.

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