TL8490
Posts: 132
Joined: Wed Sep 28, 2005 8:50 pm

Does The Speed Of BK Restructuring Really Matter?

Sun Nov 27, 2005 10:19 am

The main reason I am throwing this out there is:

1) The United 4 year trip and the results ..

2) The NW track which is much faster

3) The DL track which seems to be even faster....

The more I look at this process United wasted a lot of time...NW just seemed to decide rather quickly to declare and did not seem to have a complete plan..while DL seems to have everything done before they declared...

Does it matter either way thou????
 
FriendlySkies
Posts: 3540
Joined: Fri Aug 13, 2004 3:57 pm

RE: Does The Speed Of BK Restructuring Really Matt

Sun Nov 27, 2005 10:31 am

No, it doesn't.

*filler*
 
sllevin
Posts: 3312
Joined: Wed Jan 30, 2002 1:57 pm

RE: Does The Speed Of BK Restructuring Really Matter?

Sun Nov 27, 2005 3:37 pm

Typically, the speed at which one emerges from bankruptcy is a direct reflection of original shareholder value.

That said, it's not clear that any of the airline bankruptcies will leave any of the initial shareholders any value. But many bankruptcies occur where that's not the case, and the original shareholders do end up with some diluted value.

Steve
 
masseybrown
Posts: 4633
Joined: Wed Dec 11, 2002 2:40 pm

RE: Does The Speed Of BK Restructuring Really Matter?

Sun Nov 27, 2005 4:56 pm

Quoting Sllevin (Reply 2):
That said, it's not clear that any of the airline bankruptcies will leave any of the initial shareholders any value.

In general, you're right; but there were two recent exceptions.

The first US bankruptcy preserved equity; but, of course, that was the problem with the first US bankruptcy: in order to save the equity they retained all the debt, which doomed the first reorganization.

The HA bankruptcy also left the stockholders intact; in fact they could have profited handsomely, depending on timing of buys and sales.. The HA bankruptcy, however, was a management miscalculation and never should have happened. The company was basically sound and earned money throughout the period of bankruptcy.

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