Pinnacle Airlines' Chapter 11

On April 1, 2012, Pinnacle Airlines became the 11th smaller airline to file Chapter 11 since the Oct. 17, 2005, effective date of major amendments to the Bankruptcy Code (“BAPCPA”). Eight of the ten prior smaller airlines wound up discontinuing operations or being acquired, but Pinnacle seeks to buck that trend and continue operating under its existing name. In order to do so, it has reached an agreement with its critical customer, Delta Airlines (“Delta”) on a partially-prepackaged plan. Pinnacle's bankruptcy represents an example of a case where one third-party's interests ' in this case, Delta ' dominate the reorganization proceedings. Although Delta's agreement with Pinnacle does not specify the treatment required of other creditors and parties-in-interest, the framework created by the agreement leaves other parties-in-interest, especially Pinnacle's unions, only a narrow boundary for adjusting their interests.