Republic says unsecured creditors to see less than 50% recovery

Republic Airways’s unsecured creditors are likely to recover less than 50c on the dollar in the airline’s bankruptcy, and stockholders should expect nothing at all, according to a letter from the company. The pool of money available to pay creditors will be no greater than $275m to $350m and could be reduced by at least $100m Republic will need to exit Chapter 11, the airline said in a letter to the US Trustee, the Justice Department’s bankruptcy watchdog. Unsecured creditor recoveries also depend on Republic successfully restructuring as much as $1b in debt, the airline said. “In light of those numbers, unsecured creditors are faced with the prospect of recovering potentially well less than 50c on every $1 of claims, and equity holders will therefore receive no distributions,” according to the April 4 letter, which was included in a regulatory filing. Republic wrote to ask the US Trustee to reject requests to appoint an official committee to represent shareholder interests in its bankruptcy. Such a panel would burden Republic with “substantial and duplicative costs and expenses,” the airline said. A large proportion of the company’s shares are held by “a small number of highly sophisticated investors, including one group of six wealthy hedge funds” that are already actively participating in the case, Republic said. <br/>