Aeromexico Group reached a $40 million settlement Thursday with a group of unsecured creditors asking them to drop their objection to the restructuring plan from the airline, the company’s lead attorney said Thursday.
The move is the first step in what will likely be a bankruptcy hearing for the Chapter 11 which will last several days in New York. Despite the agreement with the unsecured creditors committee, there are still objections from an “ad hoc” group of smaller creditors, especially Invictus Global Management.
As part of the deal, Aeromexico offered unsecured creditors possible distributions from a four-year “contingent value right” note, which would dole out cash allocations whenever Aeromexico exceeds its targets, the attorney said. Timothy Gaulich, from Davis Polk & Wardwell.
“This is very good news,” said the bankruptcy judge Shelley Chapman after the announcement of the agreement.