Question

Access Delta Air Lines September 30, 2007, Form 10-Q (filed in October 2007) on the SEC Edgar Web site. Using the 10-Q, answer the following questions:

1. When and why did Delta apply for Chapter 11 bankruptcy protection?

2. When did the court approve Delta’s plan of reorganization?

3. What were the terms of the reorganization with respect to its debt and stockholders? 4. Did the company qualify for fresh-start reporting?

5. In reviewing the consolidated financial statements, how do the financial statements differ from what you would typically observe for a nonbankrupt company?

6. How much money did the reorganization cost in litigation, reorganization, and restructuring

charges? Was this a material amount relative to income and assets?

7. How much debt was forgiven? Was this a material amount?

8. How was fresh-start reporting presented in the financial statements?

9. Overall, do you believe that Delta’s presentation of its bankruptcy process is informative to investors? What additional information would you like to know?

Answer 1

On September 14, 2005 (the “Petition Date”) filed voluntary petitions for reorganization under Chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”). On December 19, 2006, DAL filed with the Bankruptcy Court a Plan of Reorganization, which contemplates that Delta will emerge from bankruptcy as an independent airline. The Plan of Reorganization, as amended (the “Plan”), was approved by the holders of claims against the Debtors. On April 25, 2007, the Bankruptcy Court confirmed the Plan.