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Delta Air Lines Inc. has paid a consulting firm of former New York City Mayor Rudolph Giuliani $2.4 million and expects to pay it another $400,000 per month for advice on working through Chapter 11 bankruptcy proceedings. The bills to Giuliani Capital Advisors were disclosed in papers the airline filed with the U.S. Bankruptcy Court in New York. The capital group was started last year when parent company Giuliani Partners acquired the corporate finance practice of Ernst & Young, which has experience with airline restructurings. The Giuliani team is one of many Delta has retained to provide bankruptcy work, according to court filings. Law firms include Davis Polk & Wardwell; Stroock & Stroock & Lavan; Gibson, Dunn & Crutcher; Debevoise & Plimpton; Paul, Hastings, Janofsky & Walker; and Hogan & Hartson. Atlanta’s Alston & Bird has been hired by Delta to advise it on its pension plans and other employee benefits. Alston deputy managing partner Philip C. Cook is serving as the firm’s lead counsel on pension benefits in Delta’s bankruptcy. The firm’s rates for partners and counsel range from $300 per hour to $750 per hour, and for associates between $145 per hour and $450 per hour. Alston & Bird billed Enron Corp. about $70 million, not including expenses, for legal work done on its bankruptcy between the summer of 2002 and December 2003. Delta has hired the Blackstone Group of New York as its lead financial adviser during Chapter 11 proceedings. Blackstone already has received about $1.1 million, will be paid $200,000 per month during the proceedings, and will get an additional $10.5 million when Delta’s restructuring is completed, according to a court filing. Other advisers include San Francisco-based Babcock & Brown, which will be paid $445,000 a month for advice on aircraft financing; Greenhill & Co. of New York, hired at $200,000 a month for help in labor relations; and Bankruptcy Services, hired to file notices and process creditors’ claims. Delta also listed dozens of firms that it will hire for smaller projects at rates lower than those previously listed, according to a court filing. The Atlanta-area law firms and lawyers listed in this category include Bondurant, Mixson & Elmore; Chambers, Mabry, McClelland & Brooks; Sapronov & Associates; Walter Hellerstein of the University of Georgia School of Law; Emory Schwall; Munger & Stone; Powell Goldstein; Smith, Gambrell & Russell; and Troutman Sanders. According to the filings, Giuliani Capital Advisors will provide Delta with a myriad of consulting services, including developing “information and analyses”; providing advice on dealing with various constituencies; providing advice on cash flow and liquidity forecasting; and developing financial projections, such as business plans and strategic content. Giuliani, the former U.S. Attorney for the Southern District of New York, founded New York-based Giuliani Partners in 2002, after he left Gracie Mansion. Giuliani Partners will help Delta evaluate lease restructurings, the feasibility of reorganization and cash-flow projections, said Elizabeth K. Lanier, executive vice president and general counsel for US Airways, which plans to emerge from Chapter 11 next week. A committee of unsecured creditors to US Airways hired Giuliani Capital Advisors for advice during the airline’s bankruptcy, she said. “Our unsecured creditors committee looked to Giuliani to confirm for them the feasibility of our restructuring plan before they voted in favor of it,” Lanier said. Giuliani Partners is made up of units that focus on consulting in various industries, including law enforcement, emergency management, and mergers and acquisitions. Although Delta’s court filings do not mention lobbying as a service that Giuliani Partners will provide, a business professor speculated that government and political affairs could be another area where Giuliani can help Delta. The airline has been trying to convince Congress to let it spread out over 25 years — instead of about four years — its financial obligations to its employee pension plans. Legislation is pending in Congress to allow airlines to extend the period of time for them to make pension payments. Delta’s pension plans have $10.6 billion more in obligations than in assets. “One thing Delta and the other airlines have been saying is that if they can have a much longer window in which they can get their pension systems in order, then they’ll be able to financially weather the storm,” said Georgia State University management professor William C. Bogner. “This has been a major political battle, and the airlines haven’t been very successful at it. “You would think that Giuliani could provide a little more access, and perhaps open the doors and get hearings with congressmen,” Bogner said. Delta spokeswoman Benet Wilson declined to comment. Eli Neusner, a spokesman for Giuliani Partners, also declined to comment. Giuliani certainly has friends in high places. Since stepping down as New York’s mayor, one of his projects has been to travel the country to campaign on behalf of Republican candidates, including a stop in Georgia in fall 2004 to stump for U.S. Sen. Johnny Isakson. Giuliani also campaigned for U.S. Sens. Mel Martinez in Florida and Arlen Specter in Pennsylvania. This isn’t the first time that Giuliani Partners has gotten involved with a company in Chapter 11. Giuliani Capital Advisors was also hired by the company or creditors’ committees for the bankruptcies of Georgia textile maker WestPoint Stevens, Aloha Airlines and USG Corp., the maker of Sheetrock-brand wallboard.

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