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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