Northwest (NWACQ) closed its deal to make Mesaba a wholly-owned subsidiary. (RAN, January 15, p.5) The deal calls for Northwest to sell its 28 percent stake in MAIR Holdings (MAIR), Mesaba's parent company, for $35 million in trade for the MAIR's Mesaba shares.

Mesaba retains its claim of $145 million it filed against Northwest that it will sell to satisfy creditor claims with any remainder going to MAIR. Mesaba and Northwest reached an agreement earlier this month without MAIR, which led to intense negotiations.

Last week both boards for MAIR and Mesaba approved the deal which is now part of Mesaba's reorganization plan, filed with the bankruptcy court last week in preparation for emerging from bankruptcy in April. The plan reduces costs by $68 million and discusses how creditors will be treated as well as confirms its new labor agreements hammered out after protracted and, sometimes, bitter negotiations last year.

However, other creditors are objecting, and filed an objection in court last Tuesday. The group, led by Riley Investment Management and Thales Fund Management, blamed Northwest for causing Mesaba to go bankrupt, adding the major carrier was now trying an end run in meeting its creditor obligations by an "insider buyout." They called the $145 million settlement "grossly inadequate," and cited the $252.8 million claim Mesaba made against Northwest last summer. Riley and Thales claim Mesaba's true value is closer to $360.4 million including the $252.8 million proof of claim against the major carrier.