COSPN From Northern Mariana Islands, joined Oct 2001, 1766 posts, RR: 0 Posted (9 years 6 months 1 day 1 hour ago) and read 3413 times:
NWA: AmEx owes $63.4M
Tuesday September 27, 2:36 pm ET
Northwest Airlines Corp. has asked a bankruptcy judge to force American Express Corp. to pay it $63.4 million that Northwest says it is owed by the credit card company.
In court filings, Northwest (Pink Sheets: NWACQ - News) said the money represents payments by American Express (NYSE: AXP - News) cardholders to purchase airline tickets, and that American Express was withholding part of the payments due to Northwest. The Eagan-based airline, which filed for Chapter 11 bankruptcy protection Sept. 14, said the funds were vital to its reorganization and requested the court issue a temporary restraining order against American Express to pay the carrier.
Published September 27, 2005 by The Business Journal
VV701 From United Kingdom, joined Aug 2005, 7950 posts, RR: 21
Reply 2, posted (9 years 6 months 1 day 1 hour ago) and read 3373 times:
If Amex owes Northwest but will not pay them it suggests that Amex are owed money by NW. Are NW a lessor of one of the small number of aircraft owned and leased by Amex? If not I would guess there is some other payment due from Amex to NW that NW was hoping to get relief from by going into Chapter 11 Protection.
If this is right does anyone know what the legal situation is? Can a company that is both a creditor and debtor to another company in Chapter 11 Protection refuse to discharge a debt equal to what it is owed?
Midway7 From United States of America, joined Aug 2004, 155 posts, RR: 0
Reply 4, posted (9 years 6 months 23 hours ago) and read 3265 times:
Quoting 1millionflyer (Reply 3): Each airline that has an agreement with the various card merchants must ensure a certain reserve is met for refunds, etc. I would bet NW is not living up to their card service agreement with Amex
I wouldn't be so sure the fault lies with Northwest. I have read that credit card companies have been holding more reserve $ from airlines lately, in case one ceases operations and ticket holders who paid by credit card seek refunds as part of their card holder agreements. The most extreme case I heard was with ATA, if I recall correctly, they were not getting any money from the credit card companies until all charged travel took place.
It could be that AMEX has imposed such a policy on NW, and we all know that credit card companies love changing the terms and conditions of agreements without bilateral consent. NW could be balking at such a thing, and I would not put it past AMEX - they are bastards.
MarshalN From Hong Kong, joined Sep 2005, 1521 posts, RR: 0
Reply 6, posted (9 years 6 months 22 hours ago) and read 3147 times:
I love Amex, and to be fair, they're just making what looks to be the best business decisions to them. They wouldn't withhold money for no reason (they'd get sued for it, if nothing else). Clearly there's a risk for them if they pay now and can't get the money back in case something happens, methinks.
Has similar appeals ever been made by UAL or US when they went into bankruptcy? I think we might be seeing a sign of desperation from NWA.
Kanebear From United States of America, joined May 2002, 953 posts, RR: 1
Reply 16, posted (9 years 6 months 14 hours ago) and read 2662 times:
Quoting Midway7 (Reply 13): TWFirst - if this is the case, why did you comment in the first place?
He took offense to your assertion that AMEX are bastards. He's obviously a satisfied (and proud) employee. He has good reason to be. I'm a Centurion holder and have been a cardmember for ten years. They've never done me wrong and very rarely let me down. I can't say the same for MBNA/Chase/Fleet/Pulaski etc etc etc.
As to why AMEX wouldn't turn over funds... they're a well run business; I'd imagine they see something amiss at NW that we aren't privvy to and are protecting their interests.
FI642 From Monaco, joined Mar 2005, 1079 posts, RR: 2
Reply 20, posted (9 years 6 months 13 hours ago) and read 2564 times:
NW actually do owe AMEX money, it's in the court filing.
.... and all of that stock they made the employees buy with a promise
to buy back, then when the time came: "we can't legally repurchase it."
Now the employees lost their investment, and will lose part of their pay.
737MAX, Cool Planes for the Worlds Coolest Airline.
VV701 From United Kingdom, joined Aug 2005, 7950 posts, RR: 21
Reply 22, posted (9 years 6 months 12 hours ago) and read 2491 times:
I was flying from LHR to TLV one evening a few years back. When I got airside at LHR I found I had mislaid my Amex card. Phoned the wife and phoned Amex before boarding my flight. When I got to Tel Aviv the following morning I went to my hotel and then the Amex office and collected a replacement card that was waiting for me. So they saved my bacon (sorry!) and are certainly not bastards in my book!
Lightsaber From United States of America, joined Jan 2005, 13852 posts, RR: 100
Reply 24, posted (9 years 6 months 12 hours ago) and read 2467 times:
Quoting 1millionflyer (Reply 3): I would bet NW is not living up to their card service agreement with Amex
A sensible post. I'm not sure why the posts went downhill so fast after that... AMEX is on the line with their customers. Per most card service agreements, a company in BK can be paid on a "as you go" basis. There is a reason DL had such a tough time getting a credit card processor such a short time ago...
Quoting Midway7 (Reply 4): It could be that AMEX has imposed such a policy on NW, and we all know that credit card companies love changing the terms and conditions of agreements without bilateral consent.
Credit card companies are a business who act like a business. Yes, many of the consumer credit card companies have issues; but AMEX is mostly a corporate agency.
Quoting TWFirst (Reply 10):
LOL... obviously, you didn't meet the requirements for Card Membership.
I have a pair in my wallet (incl. the corporate).
I do wonder if AMEX is a creditor to NWA... has anyone gone through the BK docs?
Societies that achieve a critical mass of ideas achieve self sustaining growth; others stagnate.
: I only have the Platinum card , I put 94K through it last year, and over 700K since 1990. What does it take to get a Centurion?