Delta is moving closer and closer to bankruptcy. Another step in that direction happened yesterday with the formation of a creditor’s committee. It usually happens during bankruptcy, but Delta’s situation is so precarious that it’s happened beforehand. Vendors, pilots and debt holders are all involved and are getting prepared for one of three scenarios. The first is called a “non-judicial reorganization,” which means that the company doesn’t file for bankruptcy but everyone agrees to steps that would normally take place during the bankruptcy process. Basically, workers take pay cuts, benefit cuts and agree to work more hours. People who are owed by Delta agree to receive less. Everyone involved takes a hit. American was able to do this, but it’s very rare. Stockholders have the greatest risk if Delta files for bankruptcy, so that is what the company tries to prevent. The other two options involve different forms of bankruptcy. The first is called a “pre-packaged bankruptcy.” Everyone on the committee works out what they are willing to do, the stockholders get wiped out. It’s a quick in and out proposition. The last and most difficult is the type of bankruptcy in which United is involved. United had no other choice because it had worked nothing out with creditors. So the company is still struggling to come up with a working plan in bankruptcy. So, for employees, the non-judicial plan is the best scenario. For passengers, a pre-packaged deal is the best because the company will come up with all kinds of deals. Passengers will also benefit if the company files for bankruptcy. But the airline will not shut down, regardless of what Delta does.