Part Of Behind-The-Scenes Maneuvering To Avoid Merger

US Airways' unsuccessful take over bid for Delta airlines failed largely on a rejection from Delta's official unsecured creditors committee -- the group representing those who will eventually become Delta's new owners.

In a revealing interview with the New York Times, Delta's CEO Gerald Grinstein (below) talked about how his airline weathered the storm detailing some of the behind-the-scenes wrangling during the nearly three months his airline was under siege by US Airways.

Delta amended its bankruptcy emergence reorganization plan for the second time in as many months since it was first filed on December 19. In the latest amendment, Delta's creditor's committee approved the terms of a $2.5 billion financing deal that will allow the carrier to climb out of the hole and make bankruptcy just another chapter in its history.

Grinstein told the New York Times he views US Airways' bid as a validation of Delta's reorganization efforts saying, "It convinced me we were running in the right direction. US Air wanted to take Delta’s name. It was associated with a higher level of customer service."

He said he feels much better about Delta after having staved off US Airways' hostile bid, but acknowledges there was a price.

In exchange for standing by Delta's plan to emerge from bankruptcy as a stand-alone company, the airline agreed to give its unsecured creditors committee the right to name all ten members of the airline's board following emergence, with three coming from the current board.

Additionally, management will only be allowed a four percent stake in ownership. According to Grinstein, that four percent will be spread across some 1000 individuals.

Asked to comment on Delta's pilots joining management in denouncing the take over bid, Grinstein said, "...if we've re-established a relationship of trust, going ahead it can pay dividends. For once everyone was on exactly the same page."

When asked if he had to promise to mow anyone's lawn to keep the confidence of Delta's unsecured creditors committee Grinstein said, "No, but I would have."

The airline is set to emerge from bankruptcy the end of April. Grinstein has said he should step aside when that happens adding he prefers "an internal candidate" for his successor.

FMI: www.delta.com