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Wash Post: DL/NW/Indy Chapter 11 In Sept  
User currently offlineTWFirst From Vatican City, joined Apr 2000, 6346 posts, RR: 51
Posted (9 years 5 months 14 hours ago) and read 7032 times:

Not too much of a surprise, but indications are getting stronger that Delta, Northwest, and perhaps Independence will file for Chapter 11 in mid-Sept to take advantage of the current bankruptcy laws before new ones take effect on Oct. 1....

http://money.cnn.com/2005/08/02/news...lines_bankruptcy/index.htm?cnn=yes


An unexamined life isn't worth living.
35 replies: All unread, showing first 25:
 
User currently offlineFlyGuyClt From United States of America, joined Aug 2005, 537 posts, RR: 8
Reply 1, posted (9 years 5 months 14 hours ago) and read 7020 times:

You forgot the key word "COULD."

But thanks for the info and the link.

Safe Flying  Smile

Hopefully no more Chapter 11's for anyone.



Florida Express, Braniff II and ......
User currently offlinePadcrasher From , joined Dec 1969, posts, RR:
Reply 2, posted (9 years 5 months 12 hours ago) and read 6820 times:

Delta's CEO has already said the new BK laws have no influence on whether the file or not. Additionally, the article mischaracterizes the memo sent to employees. The memo said more work and initiatives were need to avoid BK.

User currently offlineGoodmanr From United States of America, joined Apr 2005, 297 posts, RR: 0
Reply 3, posted (9 years 5 months 12 hours ago) and read 6706 times:

I think NW/DL are different story than Indy. NW/DL can and probably will survive. NW needs to cut labor costs, and they will be as competitive as anyone. I don't think indy, no matter what they do, can ever do all that well. They bring too much capacity to all their markets, they need to file ch. 7, or go back to flying as an express carrier for a legacy.


USAirways - Chairmans Gold
User currently offlineCommavia From United States of America, joined Apr 2005, 11983 posts, RR: 62
Reply 4, posted (9 years 5 months 12 hours ago) and read 6706 times:

I sincerely hope for the sake of the employees of DL and NW that they don't have to file ever, but both companies may be forced to.

Quoting Padcrasher (Reply 2):
Delta's CEO has already said the new BK laws have no influence on whether the file or not.

And Leo Mullin said he wasn't overpaid!  Smile (Being sarcastic -- I don't actually know if he said that, although I'm pretty sure he thought it.)

Realistically, despite what Grinstein says, I think it is only logical to assume that DL is following the new bankruptcy laws pretty closely and no doubt, if they think that they will have to file after the summer is over, I can't imagine that they would wait until after the new law comes into effect. He can say that the bankruptcy law change has no influence, but I think that's ridiculous and, if true, very poor management. If DL would do better under the current law than the one about to go into effect, that it is no doubt in DL's (and DL's management's) best interests to file before October.

Quoting Padcrasher (Reply 2):
The memo said more work and initiatives were need to avoid BK.

What is the difference between that and the article?

You say that he said: more work is needed.
They say that he said: the work we did isn't enough.


User currently offlinePanamair From United States of America, joined Oct 2001, 4977 posts, RR: 25
Reply 5, posted (9 years 5 months 11 hours ago) and read 6608 times:
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Quoting Commavia (Reply 4):
Realistically, despite what Grinstein says, I think it is only logical to assume that DL is following the new bankruptcy laws pretty closely and no doubt, if they think that they will have to file after the summer is over, I can't imagine that they would wait until after the new law comes into effect. He can say that the bankruptcy law change has no influence, but I think that's ridiculous and, if true, very poor management. If DL would do better under the current law than the one about to go into effect, that it is no doubt in DL's (and DL's management's) best interests to file before October.

The provision that would have the most impact for DL is the one limiting management to an 18 month period to file a reorg plan. Grinstein has said that if DL were ever to file, they would plan to exit within 12 months and so this change would not be a decision driver for DL. The other changes involved having to pay utility bills in advance (which would amount to around $25-30 million for DL - again, not a decision driver) and severely restricting retention policies for key executives (again, not a decision driver and considering that DL just went through a management shakeup anyway).


User currently offlineFriendlySkies From United States of America, joined Aug 2004, 4120 posts, RR: 5
Reply 6, posted (9 years 5 months 9 hours ago) and read 6415 times:

Quoting Panamair (Reply 5):

The provision that would have the most impact for DL is the one limiting management to an 18 month period to file a reorg plan. Grinstein has said that if DL were ever to file, they would plan to exit within 12 months and so this change would not be a decision driver for DL.

Didn't UA say they'd be out in 12 months too? Look how that went...


User currently offlineN328KF From United States of America, joined May 2004, 6491 posts, RR: 3
Reply 7, posted (9 years 5 months 9 hours ago) and read 6401 times:

We need corporate Darwinism in the form of Chapter 7.


When they call the roll in the Senate, the Senators do not know whether to answer 'Present' or 'Not guilty.' T.Roosevelt
User currently offlinePadcrasher From , joined Dec 1969, posts, RR:
Reply 8, posted (9 years 5 months 8 hours ago) and read 6302 times:

There was a point by point explanation in the conference call on why the new BK laws matter not to Delta.

It is only your uneducated opinion Comavia that it would be better for Delta to file before October. GG doesn't feel that way. Delta still has 1.7 Billion. You can make no case for BK this year. GG said in the memo more out of court work is needed to avoid BK and that is what he will do.


User currently offlineFlyPNS1 From United States of America, joined Nov 1999, 6733 posts, RR: 24
Reply 9, posted (9 years 5 months 8 hours ago) and read 6264 times:

Quoting Padcrasher (Reply 8):
You can make no case for BK this year.

Actually, a case can easily be made. If DL is going to file, they need to have enough cash on hand to actually make it through the BK process. If they wait till next year, DL's cash reserves will be extremely low which makes a successful emergence from BK less likely. This is particularly true if pension legislation doesn't pass in a timely manner.

Remember last year, GG stated that he would make cuts one time only because he wanted to "do it once and do it right." Clearly, he was wrong, because now he is talking about another round of cuts.

Can DL still avoid BK? I believe they can. However, DL's management needs to act fast and quick talking. GG has been saying for months that additional cuts need to be made (beyond the original $5 billion), yet we've seen very little action. DL's management continues to be too slow in reacting to the changes in this industry.


User currently offlineSTT757 From United States of America, joined Mar 2000, 16908 posts, RR: 51
Reply 10, posted (9 years 5 months 8 hours ago) and read 6249 times:

Quoting FriendlySkies (Reply 6):
Didn't UA say they'd be out in 12 months too? Look how that went...

UAL has received another extension,

http://news.yahoo.com/s/ap/20050802/ap_on_bi_ge/united_airlines



Eastern Air lines flt # 701, EWR-MCO Boeing 757
User currently offlinePadcrasher From , joined Dec 1969, posts, RR:
Reply 11, posted (9 years 5 months 8 hours ago) and read 6232 times:

But they are not down to the 1 Billion mark. The 1 Billion mark that I have read over and over again by various brokerage house publications. They are not even close. You are making my case.

User currently offlineFlyPNS1 From United States of America, joined Nov 1999, 6733 posts, RR: 24
Reply 12, posted (9 years 5 months 8 hours ago) and read 6195 times:

Quoting Padcrasher (Reply 11):
But they are not down to the 1 Billion mark. The 1 Billion mark that I have read over and over again by various brokerage house publications. They are not even close. You are making my case.

The 1Billion mark is the lowest DL will go before filing. However, in reality, they will probably file sooner.

Here's an analogy: Do you always wait for your cars gas gauge to be pointing at E before you refill? Probably not. Most people will fill up around the 1/4 mark because they know it's too risky to wait till the gauge is at E. $1Billion is the E for Delta, but they won't necessarily wait that long.

Keep in mind that DL could easily be at that 1 Billion mark by 12/31....of course this depends on many variables (fuel, pension relief, etc).


User currently offlineMariner From New Zealand, joined Nov 2001, 25712 posts, RR: 85
Reply 13, posted (9 years 5 months 8 hours ago) and read 6188 times:
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Quoting Padcrasher (Reply 11):
But they are not down to the 1 Billion mark. The 1 Billion mark that I have read over and over again by various brokerage house publications.

What's a billion, here or there?

"The airline ended the second quarter with about $2 billion in cash reserves, a key watermark that Delta officials say the company needs to preserve in order to avoid a crisis."

http://msnbc.msn.com/id/8783274/

cheers

mariner



aeternum nauta
User currently offlinePadcrasher From , joined Dec 1969, posts, RR:
Reply 14, posted (9 years 5 months 8 hours ago) and read 6175 times:

LOL. Well you analogy is not grounded in reality.

Again, I've read the reports from Goldman Sachs, Ray Niedl, Bear Sterns, etc. They don't share your wild guess about the cash limit.

1 Billion is what they need.


User currently offlinePadcrasher From , joined Dec 1969, posts, RR:
Reply 15, posted (9 years 5 months 8 hours ago) and read 6151 times:

That paragraph makes no sense. Watermark? Delta has been below the 2 Bil mark for 9 Months now. Obviously MSNBC is missing something.

User currently offlineMtnmanmakalu From Ireland, joined Nov 2004, 515 posts, RR: 3
Reply 16, posted (9 years 5 months 8 hours ago) and read 6117 times:

Quoting STT757 (Reply 10):
UAL has received another extension

This is an old joke- If they can't get their s**t together in going on 3 years in bankruptcy now, they never will!! Crap or get off the pot UA!!

And as for NW or DL- I'm sure they are both looking at bankruptcy as an easy option to let some judge play "God" with their contracts and pensions just like they did at UA and US... I hope it doesn't happen but it is looking more like it will everyday that passes...

mtnman



I do, I don't, whatever.......
User currently offlineExFATboy From United States of America, joined Jul 2003, 2974 posts, RR: 9
Reply 17, posted (9 years 5 months 8 hours ago) and read 6085 times:

Quoting Mtnmanmakalu (Reply 16):
This is an old joke- If they can't get their s**t together in going on 3 years in bankruptcy now, they never will!! Crap or get off the pot UA!!

This latest extension was requested by the creditor's committee, not management.

I've been as critical of UA management as anyone about the interminable delays in filing, but this extension isn't their idea. GIven the incredible reorg costs in their last financials, I'd hope to God that they were actually ready this time.


User currently offlineFriendlySkies From United States of America, joined Aug 2004, 4120 posts, RR: 5
Reply 18, posted (9 years 5 months 8 hours ago) and read 6065 times:

Quoting Mtnmanmakalu (Reply 16):
This is an old joke- If they can't get their s**t together in going on 3 years in bankruptcy now, they never will!! Crap or get off the pot UA!!

Are you sure that's a joke? I don't find it funny at all.


User currently offlineTPASXM787 From United States of America, joined Mar 2005, 1730 posts, RR: 19
Reply 19, posted (9 years 5 months 7 hours ago) and read 6051 times:

DL is a mess there is no doubt about that.

However, in this day and age, who isn't a mess? Yes, AA/CO posted small profits this quarter, but it is the summer, and what will happen later this year in the slower season? It's important to look at the whole year before making too many outlandish predictions.

That being said, DL is in a very precarious position since they basically leveraged the whole company with the loan from AMEX. Any way about it, there is no way that approx. $22bil in assets and $27bil in debts is good.

Something has to give.



This is the Last Stop.
User currently offlineMtnmanmakalu From Ireland, joined Nov 2004, 515 posts, RR: 3
Reply 20, posted (9 years 5 months 7 hours ago) and read 6052 times:

Quoting FriendlySkies (Reply 18):
Are you sure that's a joke? I don't find it funny at all.

Actually its a sad, sick joke and it shows what is wrong with the bankruptcy system in the US- Can you imagine a "regular" citizen trying to milk it out for this long... Give us all a break!!!



I do, I don't, whatever.......
User currently offlineMariner From New Zealand, joined Nov 2001, 25712 posts, RR: 85
Reply 21, posted (9 years 5 months 7 hours ago) and read 6051 times:
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Quoting Padcrasher (Reply 15):
Delta has been below the 2 Bil mark for 9 Months now.

Hmmm? Delta thinks they have $2 billion.

http://news.delta.com/article_display.cfm?article_id=9797

"At June 30, 2005, Delta had $2.0 billion in cash and cash equivalents and short-term investments, of which $1.7 billion was unrestricted."

cheers

mariner



aeternum nauta
User currently offlinePadcrasher From , joined Dec 1969, posts, RR:
Reply 22, posted (9 years 5 months 7 hours ago) and read 5953 times:

Mariner,

You're confused. The cash balance that we speak of the the "unrestricted" cash balance. The loan covenant limits are set from this figure. The 1 Billion that you've heard me mention is the "unrestricted" balance that would set off a filing.

It doesn't matter that some know nothing web reporter called the 2 Bil figure a "water mark". It has nothing to do with the issue at hand.


User currently offlineMariner From New Zealand, joined Nov 2001, 25712 posts, RR: 85
Reply 23, posted (9 years 5 months 7 hours ago) and read 5793 times:
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Quoting Padcrasher (Reply 22):
You're confused. The cash balance that we speak of the the "unrestricted" cash balance.

I'm not remotely confused, Padcrasher.

You can tap dance around this as much as you like, you can sing five acts of "Lucia di Lammormoor", but unless Delta is lying to the SEC, they had $2 billion in cash and cash equivalents at the end of the 2Q.

You may be speaking of "unrestricted cash balances" - but I am not. I cannot speak for MSNBC, but it makes sense to me.

Now - your CEO may chose to ignore perilous thresholds but that doesn't mean the MSNBC concept is wrong.

cheers

mariner



aeternum nauta
User currently offlineScott0305 From United Kingdom, joined May 2005, 196 posts, RR: 0
Reply 24, posted (9 years 5 months 7 hours ago) and read 5680 times:

"Actually its a sad, sick joke and it shows what is wrong with the bankruptcy system in the US- Can you imagine a "regular" citizen trying to milk it out for this long... Give us all a break!!!"

Well said. When will all this time and money wasting silliness end? What is clearly needed in the US airline industry is consolidation. Too many majors and too much protection. Into bankruptcy, out of bankruptcy, into bankruptcy....give me a break!


25 IRelayer : And they got to keep most of their capital, renegotiate all of their lease terms, etc etc...its just outrageous. Bankruptcy "protection" is just that
26 Schipholjfk : Delta's stock price is at 43 year low today (Aug 2, 2005) !!! What does that tell you?
27 Jdaniel001 : Indy could file earlier than September. But they should go directly to liquidation, as no bank would ever give them DIP financing. They have no histor
28 Flyibaby : JDaniel It seems like every since you left INDY you've become a bit of an Indy basher. Were you really that unhappy? By the way, this is for no one el
29 Post contains images StevenUhl777 : As my macroeconomics professor used to joke: "What's a few zero's among friends?!" Seriously...forget about $1 Billion. An airline like DL or UA, and
30 Commavia : For the sake of the industry, I'd hope so, but unfortunately, I'm not too optimistic. There appears to be creditors right now who have absolutely no
31 Jdaniel001 : I wonder if there is any rules in the Sarbans-Oxley Law that allows the public to turn in these idiots for wasting money on pipe dreams.
32 Flashmeister : Indy has no history? Didn't they manage to stay in the air as Atlantic Coast for a few years before their "transformation"? It's not over until the pa
33 Goodmanr : I think US and Indy are different stories. At least US still has some routes that they can make money on, Indy has heavy competition on every route t
34 MAH4546 : The second quarter is two-third during the spring. You can't report summer (third quarter) results until the summer ends. And considering that April
35 Midway2AirTran : It wouldn't suprise me if Delta delayed filing till after the new laws pass as they have been attempting to do everything out of court for so long now
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