JP Morgan Chase Objects Northwest Airlines $1.4 Billion

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Aug 4

JP Morgan Chase Objects Northwest Airlines $1.4 Billion

Rob Willers

Know More: Northwest Airlines 2.0, Northwest Airlines

JPMorgan Chase & Co. (JPM) has filed papers in a Manhattan court objecting to the $1.4 billion dollar financing that Northwest Airlines has requested as a part of their bankruptcy exiting program. JP Morgan Chase Bank says that Northwest Airlines shouldn't be allowed to pay off a $975 million loan unless it also pays $60 million in prepayment penalties and other debts owed to the bank.

It said Northwest shouldn't be allowed to complete the deal without fulfilling contractual obligations to JP Morgan. It intends to use the new Citigroup loan to pay off the JP Morgan loan, saying the move will save it $34 million a year in interest costs and "facilitate a successful reorganization."

Northwest, however, has balked at paying a $19.5 million prepayment penalty that JP Morgan has demanded. JP Morgan also has demanded an additional $41 million in default interest payments and fees. In court papers filed, the bank said Northwest should make arrangements to pay those amounts before it proceeds with the Citigroup deal.

WCCO-TV Minneapolis- St. Paul via Topix.net

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Northwest Flight Attendants Learning of Proposed Contract Details Apr 28, 2007
Just Seven Hours to the Deadline... Will They Strike? Aug 25, 2006
CHAOS is Coming to Northwest Airlines Aug 25, 2006
Northwest Airlines Files for Strike Block Aug 21, 2006
No New Talks Between NWA and Flight Attendants Aug 14, 2006

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