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Latam Airlines Group SA can send its $5.4 billion bankruptcy-exit plan to creditors for a vote, a judge said Tuesday, handing the airline a partial victory over debtholders who want to pursue alternatives, including a takeover by rival Azul SA, Bloomberg News reported. The decision means the company can seek final court approval for its reorganization plan in April and possibly exit bankruptcy several months after that, should it get support from securities regulators in Chile, where Latam is based. Bankruptcy Judge James Garrity rejected arguments that Latam’s proposal is so obviously flawed that it could never win final court approval. Judge Garrity’s decision still allows holdout creditors, including Avenue Capital Management and Pentwater Capital Management, to bring up their objections again when the reorganization comes back to the judge for a final decision. Several obstacles remain before Latam can ask Judge Garrity to bless the reorganization. Later this month, the judge has scheduled a hearing on whether to approve a restructuring support agreement. That deal would help Latam gets its plan approved by guaranteeing support from key creditors, but has drawn scrutiny because it calls for paying those creditors hefty fees. The company must also either refinance, or get an extension of a loan that it took out to help pay for its reorganization. That so-called debtor in possession loan matures in April, company attorney Lisa M. Schweitzer said during a virtual court hearing.

Aeromexico on Friday won court approval of its restructuring plan after the airline struck a deal with the remaining holdouts among its creditors, clearing the way for it to emerge from bankruptcy with new controlling shareholders, Reuters reported. "I could not be more pleased to tell you the plan of reorganization is confirmed," U.S. Bankruptcy Judge Shelley Chapman said soon after the agreement to pay a settlement to the creditors was announced during a court hearing. Her approval of the plan allows Aeromexico, one of three major Latin American airlines to seek court protection from creditors during the pandemic, to complete the bankruptcy process, which has been ongoing since June 2020. Aeromexico shares were up 17% on Friday, although those gains did not appear to reflect the creditor deal and final approval, which came as the market was about to close. The plan provides for new infusions of capital into Aeromexico. Apollo Global Management, a frequent investor in distressed companies, will be the largest shareholder. Delta Air Lines Inc., an existing equity holder, is expected to have a 20% stake in the company once the plan is implemented. The deals struck on Friday brought in support from a group of junior creditors who had opposed what they argued was overly beneficial treatment for Delta and four Mexican individual investors.

Grupo Aeromexico SAB cut a last-minute deal with the main group of its unsecured creditors, easing the way for the airline to seek final approval to exit bankruptcy from a judge in New York, Bloomberg News reported. The official committee of unsecured creditors in the company’s chapter 11 case agreed to join more senior debt-holders who back the plan, including Apollo Global Management Inc. and Delta Air Lines Inc. In return, unsecured creditors will get a note for $40 million, contingent on future performance. The agreement means the only opposition the company faces to its proposal to slash $1.1 billion of debt is a smaller group of unsecured creditors led by Invictus Global Management and Corvid Peak Capital Management. That group objects to the reorganization proposal, which would hand ownership stakes to senior debt-holders Apollo and Delta. The deal was announced at the start of a court hearing in Manhattan being overseen by U.S. Bankruptcy Judge Shelley Chapman, who will hear final arguments about the proposal and then decide whether to approve the reorganization plan and allow Aeromexico to exit bankruptcy.