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Delta bankruptcy-free

On Monday, airline will leave court protection and celebrate rebirth

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CEO Gerald Grinstein, right, plans to retire from Delta. Chief Financial Officer Ed Bastian, left, is one of two leading internal candidates to take his place.

CEO Gerald Grinstein, right, plans to retire from Delta. Chief Financial Officer Ed Bastian, left, is one of two leading internal candidates to take his place.

Seth Wenig, Associated Press

NEW YORK — It took almost two years and 6,000 job cuts, but Delta Air Lines on Wednesday at last received the approval it sought to emerge from bankruptcy protection as an independent company.

On Monday, it plans to be reborn, with new shares, a restructured fleet and lower labor costs, but without the protection from creditors that the court provided.

Atlanta-based Delta Air Lines Inc. will again have to answer to shareholders, who likely will want to see results quickly.

Delta, which operates a hub at Salt Lake City International Airport, estimates it will be worth $9.4 billion to $12 billion.

More than 95 percent of creditors voted to endorse the plan for Delta to leave bankruptcy as a stand-alone carrier. That plan had been put in jeopardy by a $9.8 billion hostile takeover bid launched last fall by US Airways Group Inc., based in Tempe, Ariz. Delta successfully persuaded creditors to back its blueprint to emerge from bankruptcy and reject the buyout offer.

Now that it is leaving court protection, Delta may sell off its regional carrier subsidiary, Kentucky-based Comair, which has received poor marks for lost baggage and flight delays.

Chief Executive Officer Gerald Grinstein said Wednesday not to expect any "immediate action" on Comair since the company has a new board of directors.

Delta's board also will choose a successor to Grinstein, who plans to retire. Grinstein, who is 74, has said the two leading internal candidates are Chief Financial Officer Ed Bastian and Chief Operating Officer James Whitehurst.

Delta will celebrate its emergence Monday in Atlanta. Shares in the reorganized Delta, with the ticker symbol DAL, are scheduled to begin trading again next Wednesday on the New York Stock Exchange.

"I feel elated," Grinstein said after the hearing. "For the 47,000 (employees) ... they're the ones who went through all the angst and made the sacrifices. It's for them I feel extreme relief."

Delta's reorganization plan will give unsecured creditors between 62 percent and 78 percent of the value of their allowed claims as shares of new Delta stock.

The company's existing stock, which will be worthless, continued to trade until the court's approval of the plan. The shares fell 3.5 cents, or 21.2 percent, Wednesday to 13 cents on the Pink Sheets, an over-the-counter electronic trading platform.

Since January 2001, the company has lost a total of more than $18 billion. In recent months, though, Delta's financial situation has improved, with the company projecting a 2007 pretax profit of $816 million, excluding special charges and reorganization costs.

Delta entered Chapter 11 on Sept. 14, 2005, amid high fuel prices and the burdens of soaring labor and retirement benefits expenses.

Since then, passengers on all airlines have experienced growing flight delays as staffs are trimmed and fares go up, driven by rising fuel costs. While in bankruptcy, Delta had expanded its international flights and will continue growing that part of the business, focusing on John F. Kennedy International Airport in New York.

Next week, 39,000 Delta employees are expected to receive cash and new stock in Delta worth a total of $480 million. The total equity stake the employees will get equals 3.5 percent of the company. Delta is also giving 1,200 managers a 2.5 percent stake, valued at $240 million, in the reorganized company.

Delta has 47,000 employees now. It had 53,000 employees when it entered bankruptcy.

Since January 2001, Delta has announced that it would cut up to 33,000 jobs.

Before entering bankruptcy, Delta had already sought $5 billion in cost savings to be reached by the end of 2006.

Grinstein said the board would hold a regularly scheduled meeting over dinner Wednesday night.