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What Happens When A Ch11 Airline Folds?  
User currently offlineDolinja777 From United States of America, joined Feb 2005, 37 posts, RR: 0
Posted (8 years 5 days 8 hours ago) and read 2308 times:

If NW does go under as a result of the current action, what does happen to people holding tickets if they can't be rebooked? Are they guaranteed a refund in any way? Or are you considered an unsecured creditor of the airline and basically swept under the carpet?

6 replies: All unread, jump to last
 
User currently onlineStarlionblue From Greenland, joined Feb 2004, 17017 posts, RR: 67
Reply 1, posted (8 years 5 days 8 hours ago) and read 2308 times:

Quoting Dolinja777 (Thread starter):
If NW does go under as a result of the current action, what does happen to people holding tickets if they can't be rebooked? Are they guaranteed a refund in any way? Or are you considered an unsecured creditor of the airline and basically swept under the carpet?

It really depends how much money the company is left with after liquidation. Generally, the pecking order is:
- Employees.
- Creditors.
- Owners.

I would say that you can probably kiss your money goodbye.



"There are no stupid questions, but there are a lot of inquisitive idiots."
User currently offlineLitz From United States of America, joined Dec 2003, 1763 posts, RR: 0
Reply 2, posted (8 years 5 days 5 hours ago) and read 2241 times:
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This is a PRIME example of why you buy your tickets with a major credit card.

Almost all cards have provisions for crediting the value of the ticket in case of an airline ceasing operations (really, it doesn't even have to go out of business - just become unable to operate the flight you've paid for).

- litz

[Edited 2006-08-18 21:20:08]

User currently offlineAA777SJC From United States of America, joined Mar 2006, 57 posts, RR: 0
Reply 3, posted (8 years 5 days 5 hours ago) and read 2222 times:

You can't get a refund, but other airlines will generally honor tickets the ones in the first week on a standby basis. Does anyone know how long other airlines honor tickets on a Chap 7 airline?

btw Chapter 11 bankruptcy is when you reorganize
Chapter 7 bankruptcy is when you liquidate


User currently offlineSJUSXM From United States of America, joined Aug 2006, 294 posts, RR: 0
Reply 4, posted (8 years 5 days 5 hours ago) and read 2207 times:

Quoting Starlionblue (Reply 1):
It really depends how much money the company is left with after liquidation. Generally, the pecking order is:
- Employees.
- Creditors.
- Owners.

Not @ NW



AT7, ER3, ER4, ER5, CR7, E70, E75, F100, M82, M83, 722, 732, 738, 752, 762, 763, AB6, 320, 321, 772, 77W
User currently offlineFutureFO From Ireland, joined Oct 2001, 3132 posts, RR: 21
Reply 5, posted (8 years 5 days 4 hours ago) and read 2166 times:

Look at the case of DH. They folded after filing for BK protection.



Sean



I Don't know where I am anymore
User currently onlineStarlionblue From Greenland, joined Feb 2004, 17017 posts, RR: 67
Reply 6, posted (8 years 5 days 3 hours ago) and read 2117 times:

Quoting SJUSXM (Reply 4):
Quoting Starlionblue (Reply 1):
It really depends how much money the company is left with after liquidation. Generally, the pecking order is:
- Employees.
- Creditors.
- Owners.

Not @ NW

Employees only get paid if they worked the hours of course. The company can try to fire them before liquidation.



"There are no stupid questions, but there are a lot of inquisitive idiots."
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