Northwest Can Take Plan to Creditors

Northwest Airlines Corp. may now seek creditor approval of a plan to emerge from bankruptcy, a federal bankruptcy judge in New York ruled Monday.

The plan values the airline at about $7 billion — a value an ad hoc shareholder committee says undervalues the airline.

Northwest will be allowed to release its disclosure statement to creditors along with a restructuring plan once the airline revises the statement to conform with agreements reach in court Monday, U.S. Bankruptcy Judge Allan Gropper said.

A reorganization plan could be mailed to creditors as early as April 6.

Under Northwest’s plan, secured creditors would be fully paid and unsecured creditors would get 74 cents on the dollar.

Half the claimants representing two-thirds the dollar amounts in each class of creditors must approve the plan for it to go through.

The Eagan, Minn., airline hopes to step out of bankruptcy-court protection in early June.

The nation’s fifth-largest airline by traffic sought protection from creditors in September 2005, the same day as No. 2 Delta Air Lines and in the same court.

It ended 2006 with $2.1 billion in cash on its balance sheet.