COSPN
Topic Author
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Amex Witholding Funds From NW

Wed Sep 28, 2005 11:24 pm

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
 
777Purser
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RE: Amex Witholding Funds From NW

Wed Sep 28, 2005 11:31 pm

"You need to pay us even if we don't pay anyone else..." I am just tired of hearing from NWA specially the way they are treating their employees.
 
vv701
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RE: Amex Witholding Funds From NW

Wed Sep 28, 2005 11:35 pm

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?
 
1MillionFlyer
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RE: Amex Witholding Funds From NW

Wed Sep 28, 2005 11:39 pm

Quoting VV701 (Reply 2):
it suggests that Amex are owed money by NW.

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
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midway7
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RE: Amex Witholding Funds From NW

Thu Sep 29, 2005 1:04 am

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.
 
1MillionFlyer
Posts: 1937
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RE: Amex Witholding Funds From NW

Thu Sep 29, 2005 1:21 am

Quoting Midway7 (Reply 4):
past AMEX - they are bastards.

It's the golden rule - "He who has the gold rules"

I run about 80,000 a year for travel through my AMEX I love them  Smile
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MarshalN
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RE: Amex Witholding Funds From NW

Thu Sep 29, 2005 2:01 am

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.
 
TWFirst
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RE: Amex Witholding Funds From NW

Thu Sep 29, 2005 2:26 am

Quoting Midway7 (Reply 4):
NW could be balking at such a thing, and I would not put it past AMEX - they are bastards.

Right...... we're such "bastards" that we lent how many hundreds of millions of dollars to Delta 2 weeks ago??

What's your name Midway7?? If we're bastards, perhaps you would be better serviced by a different card issuer. I'd be happy to assist you in that transition.
An unexamined life isn't worth living.
 
N1120A
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RE: Amex Witholding Funds From NW

Thu Sep 29, 2005 2:44 am

Quoting TWFirst (Reply 7):
Right...... we're such "bastards" that we lent how many hundreds of millions of dollars to Delta 2 weeks ago??

Over $600 million all told
Mangeons les French fries, mais surtout pratiquons avec fierte le French kiss
 
midway7
Posts: 146
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RE: Amex Witholding Funds From NW

Thu Sep 29, 2005 2:44 am

Quoting TWFirst (Reply 7):
What's your name Midway7?? If we're bastards, perhaps you would be better serviced by a different card issuer. I'd be happy to assist you in that transition.

Since you claim to represent AMEX, maybe you can explain what is going on with this situation.

There is no need for my name - I don't do business with AMEX. I wouldn't give AMEX the pleasure.

Quoting TWFirst (Reply 7):
Right...... we're such "bastards" that we lent how many hundreds of millions of dollars to Delta 2 weeks ago??

The future will tell whether this was a sound business decision.
 
TWFirst
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RE: Amex Witholding Funds From NW

Thu Sep 29, 2005 5:21 am

Quoting Midway7 (Reply 9):
Since you claim to represent AMEX, maybe you can explain what is going on with this situation.

Actually, no, I cannot. The only official source of information on this matter is our designated spokesperson. I'd be happy to refer you to him though.

Quoting Midway7 (Reply 9):
There is no need for my name - I don't do business with AMEX. I wouldn't give AMEX the pleasure.

LOL... obviously, you didn't meet the requirements for Card Membership.
An unexamined life isn't worth living.
 
Braniff727
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RE: Amex Witholding Funds From NW

Thu Sep 29, 2005 5:28 am

Quoting MarshalN (Reply 6):
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.

I disagree, Northwest hasn't even tried to get DIP loans, etc. NW appears to have sought Chapter 11 protection solely to restructure. At their last filing they had $1.7 billion on hand.

If there was a company in Chapter 11 that I wouldn't pay if I was in American Express' situation, it wouldn't by Northwest, rather Delta.
Climbing
 
COSPN
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RE: Amex Witholding Funds From NW

Thu Sep 29, 2005 8:51 am

Another RUMOR is kicking around that NRT and Everything West of HNL will Close down...NRT Slots sold off and park all Widebodys except A330 for SEA/NRT-AMS PDX-NRT
 
midway7
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RE: Amex Witholding Funds From NW

Thu Sep 29, 2005 9:25 am

Quoting TWFirst (Reply 10):
Actually, no, I cannot. The only official source of information on this matter is our designated spokesperson. I'd be happy to refer you to him though

TWFirst - if this is the case, why did you comment in the first place?
 
JAXFLL
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RE: Amex Witholding Funds From NW

Thu Sep 29, 2005 10:06 am

Quoting COSPN (Reply 12):
Another RUMOR is kicking around that NRT and Everything West of HNL will Close down...NRT Slots sold off and park all Widebodys except A330 for SEA/NRT-AMS PDX-NRT

Why would Northwest do this when every airline is trying to get more international routes? This rumor makes no sense.
 
7e72004
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RE: Amex Witholding Funds From NW

Thu Sep 29, 2005 10:12 am

should i cash in my miles on Northwest?? It sounds like the sh*t is going to hit the fan
The next generation of aircraft is just around the corner!
 
kanebear
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RE: Amex Witholding Funds From NW

Thu Sep 29, 2005 10:26 am

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.
 
COSPN
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RE: Amex Witholding Funds From NW

Thu Sep 29, 2005 10:56 am

Why would Northwest do this when every airline is trying to get more international routes? This rumor makes no sense.

To Sell (for Cash) the NRT Slots...and trim down the Fleet NRT Airports fees are Excessive..

No Need for DIP Loans....What else can they sell ???
 
ejmmsu
Posts: 1647
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RE: Amex Witholding Funds From NW

Thu Sep 29, 2005 11:06 am

I get Amex offers in the mail all the time. Unfortunately i don't spend enough to warrant the annual fee.
"If the facts do not conform to the theory, they will have to be disposed of"
 
burnsie28
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RE: Amex Witholding Funds From NW

Thu Sep 29, 2005 11:14 am

Quoting COSPN (Reply 12):
Another RUMOR is kicking around that NRT and Everything West of HNL will Close down...NRT Slots sold off and park all Widebodys except A330 for SEA/NRT-AMS PDX-NRT

Wishful thinking of airlines who dont have those valuable routes, how about NW just get rid of their most valuable and profitable areas.
 
FI642
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RE: Amex Witholding Funds From NW

Thu Sep 29, 2005 11:24 am

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.
 
Ken777
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RE: Amex Witholding Funds From NW

Thu Sep 29, 2005 11:36 am

If I was looking at NW from a credit card's point of view I would be looking at how many of the tickets will not be able to be used and how much will need to be refunded to the cardholders.

First place to look? How about how NW is treating their feeder airlines? Oooops. I'd hold onto the money also.

IMO, NW has not thought things out very well.
 
vv701
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RE: Amex Witholding Funds From NW

Thu Sep 29, 2005 12:00 pm

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!
 
TWFirst
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RE: Amex Witholding Funds From NW

Thu Sep 29, 2005 12:07 pm

Quoting Kanebear (Reply 16):
I'm a Centurion holder and have been a cardmember for ten years.

Somebody's got some dough... wanna use that black card to take me out on a date??  Wink
An unexamined life isn't worth living.
 
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lightsaber
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RE: Amex Witholding Funds From NW

Thu Sep 29, 2005 12:10 pm

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.

 rotfl  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?

Lightsaber
"They did not know it was impossible, so they did it!" - Mark Twain
 
1MillionFlyer
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RE: Amex Witholding Funds From NW

Thu Sep 29, 2005 12:10 pm

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?
Golf Foxtrot you are cleared for departure
 
1MillionFlyer
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RE: Amex Witholding Funds From NW

Thu Sep 29, 2005 12:11 pm

filler filler posted 2 times

[Edited 2005-09-29 05:34:20]
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docchaos
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RE: Amex Witholding Funds From NW

Thu Sep 29, 2005 1:13 pm

From Snopes.com
http://www.snopes.com/business/bank/blackcard.asp

The AmEx Centurion card... The card for someone with LOTS of money..  Smile

DocChaos
 
BigOrange
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RE: Amex Witholding Funds From NW

Fri Sep 30, 2005 12:34 am

Quoting TWFirst (Reply 7):
Right...... we're such "bastards" that we lent how many hundreds of millions of dollars to Delta 2 weeks ago

It seems strange to me that they can invest so much money on a sinking ship, but they don't invest any money in their own company employees, who they just ditch at the first sign of a downturn in business.
 
1MillionFlyer
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Joined: Wed Sep 08, 2004 8:55 am

RE: Amex Witholding Funds From NW

Fri Sep 30, 2005 12:47 am

Quoting BigOrange (Reply 28):
It seems strange to me that they can invest so much money on a sinking ship, but they don't invest any money in their own company employees, who they just ditch at the first sign of a downturn in business.

They pre-purchased Delta Skymiles at a major discount for Membership Rewards members, this saved them many millions of dollars and gave DL cash, Cash which they have had to use to pledge towards meeting Amex's Merchant reserve agreement.

How was that a bad move?
Golf Foxtrot you are cleared for departure
 
TWFirst
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RE: Amex Witholding Funds From NW

Fri Sep 30, 2005 2:23 am

Quoting BigOrange (Reply 28):
It seems strange to me that they can invest so much money on a sinking ship, but they don't invest any money in their own company employees, who they just ditch at the first sign of a downturn in business.

Based on your profile, you are probably referring to what is now known as our Business Travel division, part of the larger Corporate Services division. As such, surely you know the challenges of operating travel services in the current industry environment. As revenues disintegrate, and the long term outlook worsens, downsizing is necessary. ALL companies do this.

All employees who are displaced are invited and eligible to post for other positions in the company. I can't see how you could possibly find any of this illogical or unusual.

Regarding the Delta investment, I can tell you this company does an extensive amount of risk analysis... and is generally very conservative. Regarding Delta, the company is quite comfortable with its current exposure. Delta is an extremely strategic partner for us.
An unexamined life isn't worth living.
 
robsawatsky
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RE: Amex Witholding Funds From NW

Fri Sep 30, 2005 2:56 am

I assume US Bankruptcy law has provisions for offsets (i.e. where money is owed in both directions between the parties) as was the case when Air Canada was in protection under similar Canadian laws. From what I recall, there were some similar issues with AC and offsets are allowed, but what can properly be treated as an offset is subject to interpretation (set-off rights). Something to do with how the debt owed by each party is related to the claim.

Initially the AC court orders prevented obligations arising after the filing date from being set-off by rights that arose before the filing date. I think this was altered later in the process but basically the creditor couldn't use the offsets to reduce their payments due AC if those payments arose after AC filed for bankruptcy protection.
 
kanebear
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RE: Amex Witholding Funds From NW

Fri Sep 30, 2005 4:11 am

Quoting TWFirst (Reply 23):
Somebody's got some dough... wanna use that black card to take me out on a date??

Gotta talk to my wife first, she might object but then again she might not.  Wink

Quoting 1MillionFlyer (Reply 25):
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?

IMO it's not worth it anymore. The annual fee has gone from $1k to $2.5k with no increase in benefits (for new cardholders). Also, your annual spend has to be $250,000 (was $150,000) to qualify. I'm grandfathered in at the lower rate and use enough of the benefits that it's worth it. These rules aren't hard and fast. Best thing to do is call and ask to be transferred to Centurion customer service and ask if your account qualifies. One nice thing is that you are Skyteam Elite and *G automatically with the Centurion as you get US Gold Preferred, CO Gold and DL gold with the card. Great for me as I fly AA, so my bases are covered on the few times I have to use other airlines.
 
schipholjfk
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RE: Amex Witholding Funds From NW

Fri Sep 30, 2005 6:53 am

Quoting TWFirst (Reply 7):
Right...... we're such "bastards" that we lent how many hundreds of millions of dollars to Delta 2 weeks ago??

With all due respect you did not lend money out of CHARITY! I am sure at the end of the day via interests your company will be well compensated. Having said that AMEX is holding "reserve" money in case NWA totally liquidates. And that seems fair. However, I also know return reserves held by CC companies are way more than realistic numbers.
The fun of flying... love it !!!
 
MarshalN
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RE: Amex Witholding Funds From NW

Fri Sep 30, 2005 7:28 am

Quoting FI642 (Reply 20):
NW actually do owe AMEX money, it's in the court filing.

Since people seem to know the NWA owes AMEX money, do people have any idea how much?

Quoting Kanebear (Reply 32):
IMO it's not worth it anymore. The annual fee has gone from $1k to $2.5k with no increase in benefits (for new cardholders). Also, your annual spend has to be $250,000 (was $150,000) to qualify. I'm grandfathered in at the lower rate and use enough of the benefits that it's worth it. These rules aren't hard and fast. Best thing to do is call and ask to be transferred to Centurion customer service and ask if your account qualifies. One nice thing is that you are Skyteam Elite and *G automatically with the Centurion as you get US Gold Preferred, CO Gold and DL gold with the card. Great for me as I fly AA, so my bases are covered on the few times I have to use other airlines.

I think they actually over issued the black card, making it less desirable since it's sort of too much -- not exclusive enough. So, they've upped the rates considerably I think to kick people out who don't really care for/want/willing to pay for the status. I know a few people with the Centurion card, and some had already quit grumbling about the doubling of the fees despite their hefty charges every year (6 figures USD). So, what did they do? They cancelled their AMEX account all together. I guess Visa must be laughing. IMO it's a stupid move.
 
kanebear
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RE: Amex Witholding Funds From NW

Fri Sep 30, 2005 1:13 pm

Quoting MarshalN (Reply 34):
I think they actually over issued the black card, making it less desirable since it's sort of too much -- not exclusive enough. So, they've upped the rates considerably I think to kick people out who don't really care for/want/willing to pay for the status. I know a few people with the Centurion card, and some had already quit grumbling about the doubling of the fees despite their hefty charges every year (6 figures USD). So, what did they do? They cancelled their AMEX account all together. I guess Visa must be laughing. IMO it's a stupid move.

At least here in the US, AMEX didn't raise fees for existing cardholders. They only instituted the new fees for new accounts. I'm sure someday they'll raise my annual fee but for now I'm grandfathered at the lower rate. I'm surprised they didn't do this elsewhere!
 
TWFirst
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RE: Amex Witholding Funds From NW

Fri Sep 30, 2005 11:35 pm

Quoting Schipholjfk (Reply 33):
With all due respect you did not lend money out of CHARITY!

Of course not... I wasn't implying we did, and yes, of course we did it with every hope that in the end, it would turn out to be a win/win situation. BUT, it may not. We assumed a risk, and we didn't have to. My point is this company isn't comprised of cold/mean/"bastard" people. We want Delta to succeed. We want NW to succeed too... but there are some issues w/NW that need to be resolved. It's not as if $63 mil is going to dent the finances of our company... there are bigger issues involved.

If fact, we want ALL of our partners, Cardmembers and other customers to succeed.... after all, it's Your Card, Your Life... and we offer Worldwide Service, Personal Recognition.... Online, Offline, All Around The World - Experience Matters.... so Don't Leave Home Without It!  Wink
An unexamined life isn't worth living.

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