We advised Delta in connection with LATAM’s chapter 11

Davis Polk advised Delta Air Lines, Inc. in connection with the chapter 11 cases of LATAM Airlines Group S.A. and its affiliated debtors (collectively, “LATAM”). LATAM filed voluntary petitions for relief under chapter 11 of the Bankruptcy Code in May and July 2020 in the United States Bankruptcy Court for the Southern District of New York.

Davis Polk guided Delta through all phases of LATAM’s chapter 11 cases, including structuring and documenting a unique debtor-in-possession financing during the height of the COVID-19 pandemic; defending the DIP financing from challenges by various creditor constituencies; securing the assumption of key contracts between Delta and LATAM, which paved the way for the consummation of a valuable joint venture between Delta and the largest Latin American airline group; defending Delta against fraudulent transfer claims pursued by a committee of unsecured creditors; and actively participating in structuring and mediating a plan of reorganization (the “Plan”) that allowed LATAM to emerge from bankruptcy.

LATAM’s Plan was confirmed on June 18, 2022, and provided for, among other things, the receipt by unsecured creditors of their pro rata share of the new convertible notes Class A or, upon additional new money investment, new convertible notes Class C in satisfaction of their allowed claims, along with the impairment, reinstatement and repayment of other classes. In connection with LATAM’s emergence, LATAM also completed the issuance of $5.4 billion in new securities, which were offered to prepetition shareholders via preemptive rights offerings and backstopped by certain unsecured creditors and prepetition shareholders. Pursuant to its participation in the preemptive rights offerings and the backstop commitment that it provided to LATAM, Delta purchased approximately $657 million of new convertible notes Class B in the reorganized LATAM and, upon conversion of such notes, is expected to obtain an approximately 10% equity ownership interest in LATAM. On November 3, 2022, upon the consummation of a series of transactions contemplated by the Plan, LATAM emerged from bankruptcy.

LATAM is Latin America’s leading airline group, operating domestic flights in Brazil, Chile, Colombia, Ecuador and Peru and international services within Latin America as well as to Europe, the United States, Africa, Asia, Oceania and the Caribbean. The company was founded in 1929 and is headquartered in Santiago, Chile.

The Davis Polk restructuring team included partners Marshall S. Huebner and Adam L. Shpeen and associates Jinhe Hu, Abraham Bane and Motty Rivkin. The litigation team included partner Lara Samet Buchwald and associate Nicholas D’Angelo. The finance team included partner Vanessa L. Jackson, counsel Mayer J. Steinman and associate Adela Troconis. Partner Maurice Blanco provided securities regulation advice. All members of the Davis Polk team are based in the New York office.

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