Delta Airlines 2008 Annual Report Download - page 109

Table of Contents
Index to Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
respectively. The actual amount that we may be required to pay in these circumstances may be materially different from these estimates. If the Chautauqua or
Shuttle America Put Right is exercised, we must also pay to the exercising carrier 10% interest (compounded monthly) on the equity the carrier provided
when it purchased the put aircraft. These equity amounts for Chautauqua and Shuttle America total $25 million and $62 million, respectively.
Legal Contingencies
We are involved in various legal proceedings relating to employment practices, environmental issues and other matters concerning our business. We
cannot reasonably estimate the potential loss for certain legal proceedings because, for example, the litigation is in its early stages or the plaintiff does not
specify the damages being sought.
Cincinnati Airport Settlement
On April 24, 2007, the Bankruptcy Court approved our settlement agreement (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 appealed to the U.S. Court of Appeals for the
Second Circuit, which in February 2009 upheld the District Court's decision. The Objecting Bondholders have filed a petition with the U.S. Court of Appeals
for the Second Circuit for a rehearing en banc.
Credit Card Processing Agreements
Visa/MasterCard Processing Agreement
In August 2008, we entered into an amendment to our Visa/MasterCard credit card processing agreement (the "Amended Processing Agreement") that,
among other things, extended the term of the agreement to December 31, 2011. The Amended Processing Agreement provides that no cash reserve
("Reserve") is required except in certain circumstances, including in which we do not maintain a required level of unrestricted cash.
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