Delta Airlines 2007 Annual Report Download - page 103

Table of Contents
Index to Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Comair and Delta continue to pursue settlement negotiations with the plaintiffs in these lawsuits. The settled cases have been dismissed with prejudice.
Comair has filed direct actions in the U.S. District Court for the Eastern District of Kentucky against the U.S. (based on the actions of the FAA), and in
state court in Fayette County, Kentucky, against the Lexington Airport Board and certain other Lexington airport defendants. Comair has also filed third party
complaints against these same parties in each of the pending passenger lawsuits. These actions seek to apportion liability for damages arising from this
accident among all responsible parties.
During 2006, we recorded a long-term liability with a corresponding long-term receivable from our insurance carriers in other noncurrent liabilities and
assets, respectively, on our Consolidated Balance Sheet relating to the Comair Flight 5191 accident. These amounts may be revised as additional information
becomes available and as settlements are finalized. We carry aviation risk liability insurance and believe that this insurance is sufficient to cover any liability
likely to arise from this accident.
Cincinnati Airport Settlement
On April 24, 2007, the Bankruptcy Court approved the Cincinnati Airport Settlement Agreement with the Kenton County Airport Board ("KCAB") and
UMB Bank, N.A., the trustee (the "Bond Trustee") for the Series 1992 Bonds (as defined below), to restructure certain of our lease and other obligations at the
Cincinnati-Northern Kentucky International Airport (the "Cincinnati Airport"). The Series 1992 Bonds include: (1) the $419 million Kenton County Airport
Board Special Facilities Revenue Bonds, 1992 Series A (Delta Air Lines, Inc. Project), $397 million of which were then outstanding; and (2) the $19 million
Kenton County Airport Board Special Facilities Revenue Bonds, 1992 Series B (Delta Air Lines, Inc. Project), $16 million of which were then outstanding.
The Cincinnati Airport Settlement Agreement, among other things:
• provides for agreements under which we will continue to use certain facilities at the Cincinnati Airport at substantially reduced costs;
• settles all disputes among us, the KCAB, the Bond Trustee and the former, present and future holders of the 1992 Bonds (the "1992
Bondholders");
• gives the Bond Trustee, on behalf of the 1992 Bondholders, a $260 million allowed general, unsecured claim in our bankruptcy proceedings; and
• provides for our issuance of $66 million principal amount of senior unsecured notes to the Bond Trustee on behalf of the 1992 Bondholders.
On May 3, 2007, the parties to the Cincinnati Airport Settlement Agreement implemented that agreement in accordance with its terms. A small group of
bondholders (the "Objecting Bondholders") challenged the settlement in the U.S. District Court for the Southern District of New York. In August 2007, the
District Court affirmed the Bankruptcy Court's order approving the settlement. The Objecting Bondholders have appealed to the U.S. Court of Appeals for the
Second Circuit.
Credit Card Processing Agreements
Visa/MasterCard Processing Agreement
In June 2007, we entered into an amended and restated Visa/MasterCard credit card processing agreement (the "Amended Processing Agreement") that,
among other things, resulted in the release by the credit card processor ("Processor") of the Reserve (defined below) under the agreement and extended the
term of the agreement to October 31, 2008.
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