TWFirst From Vatican City, joined Apr 2000, 6346 posts, RR: 52 Posted (9 years 4 weeks 18 hours ago) and read 6912 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....
Padcrasher From , joined Dec 1969, posts, RR:
Reply 2, posted (9 years 4 weeks 17 hours ago) and read 6700 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.
Goodmanr From United States of America, joined Apr 2005, 297 posts, RR: 0
Reply 3, posted (9 years 4 weeks 16 hours ago) and read 6586 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.
Commavia From United States of America, joined Apr 2005, 11559 posts, RR: 61
Reply 4, posted (9 years 4 weeks 16 hours ago) and read 6586 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! (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.
Panamair From United States of America, joined Oct 2001, 4898 posts, RR: 25
Reply 5, posted (9 years 4 weeks 16 hours ago) and read 6488 times:
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).
FriendlySkies From United States of America, joined Aug 2004, 4105 posts, RR: 5
Reply 6, posted (9 years 4 weeks 14 hours ago) and read 6295 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...
Padcrasher From , joined Dec 1969, posts, RR:
Reply 8, posted (9 years 4 weeks 13 hours ago) and read 6182 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.
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.
FlyPNS1 From United States of America, joined Nov 1999, 6606 posts, RR: 24
Reply 12, posted (9 years 4 weeks 12 hours ago) and read 6075 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).
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...
ExFATboy From United States of America, joined Jul 2003, 2974 posts, RR: 9
Reply 17, posted (9 years 4 weeks 12 hours ago) and read 5965 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.
TPASXM787 From United States of America, joined Mar 2005, 1730 posts, RR: 19
Reply 19, posted (9 years 4 weeks 12 hours ago) and read 5931 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.
Padcrasher From , joined Dec 1969, posts, RR:
Reply 22, posted (9 years 4 weeks 12 hours ago) and read 5833 times:
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.
Mariner From New Zealand, joined Nov 2001, 25142 posts, RR: 85
Reply 23, posted (9 years 4 weeks 11 hours ago) and read 5673 times:
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.
Scott0305 From United Kingdom, joined May 2005, 196 posts, RR: 0
Reply 24, posted (9 years 4 weeks 11 hours ago) and read 5560 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!
: 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
: Delta's stock price is at 43 year low today (Aug 2, 2005) !!! What does that tell you?
: 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
: 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
: 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
: 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
: 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.
: 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
: 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
: 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
: 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