Aeromexico to Defend Restructuring in New York Bankruptcy Court

A U.S. bankruptcy court will start considering Grupo Aeromexico SAB de CV's proposed reorganization plan on Thursday, as the Mexican carrier battles junior creditors who say they are being unfairly treated in a hearing likely to stretch over several days, Reuters reported. Aeromexico, which filed for chapter 11 protection in New York in June 2020, will make its case to U.S. Bankruptcy Judge Shelley Chapman for its proposal, which would infuse new capital into the company and make Apollo Global Management, a frequent investor in distressed companies, the largest shareholder. Though the airline has lined up the support it says it needs from its multiple creditor groups, some still say the plan should not be approved unless junior creditors, some of whom may see just pennies on the dollar, receive better recoveries. Judge Chapman has set aside several days for the hearing, so will likely not rule on the plan on Thursday. If she ultimately approves the deal, Aeromexico — one of three major Latin American airlines that filed for bankruptcy during the pandemic — will be able to exit bankruptcy. The plan, according to the airline, would reduce its debt by $1 billion and save around 13,000 jobs. But junior creditors argue it is overly beneficial to existing shareholders, including Delta Air Lines In. and four board members, at their expense.