Opinion ID: 149094
Heading Depth: 3
Heading Rank: 2

Heading: Meaning of Required to Pay

Text: The bankruptcy court's interpretation of the required to pay language in DFO's TIAs was no less flawed. The court found that [t]here can be no dispute that [an excluded event] has happenedby reason of Delta's [Lease default], the indenture trustee has demanded that Delta pay, and Delta `is required to pay,' SLV under Section 15(e) of the Lease. In re Delta Air Lines, Inc., 370 B.R. at 559. Though it is not entirely clear, the court's reasoning seems to be that Delta is required to pay SLV whenever an Indenture Trustee makes a legally supported demand for payment of SLV, whether or not that demand is met. In other words, the bankruptcy court held that whenever an Indenture Trustee properly demands of Delta that it pay SLV, Delta is released from its obligation under the TIA to indemnify the Owner Participant for its tax losses, regardless of whether Delta ever pays any part of SLV to the Indenture Trustee. For all the reasons just discussed, that interpretation is patently at odds with the intent of the parties in contracting for the TIAs. [4]