dolinja777
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What Happens When A Ch11 Airline Folds?

Sat Aug 19, 2006 1:49 am

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?
 
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Starlionblue
Posts: 17119
Joined: Fri Feb 27, 2004 9:54 pm

RE: What Happens When A Ch11 Airline Folds?

Sat Aug 19, 2006 1:51 am

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." - John Ringo
 
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litz
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RE: What Happens When A Ch11 Airline Folds?

Sat Aug 19, 2006 4:19 am

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]
 
aa777sjc
Posts: 46
Joined: Fri Mar 24, 2006 6:19 am

RE: What Happens When A Ch11 Airline Folds?

Sat Aug 19, 2006 4:32 am

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
 
SJUSXM
Posts: 261
Joined: Fri Aug 11, 2006 1:52 pm

RE: What Happens When A Ch11 Airline Folds?

Sat Aug 19, 2006 4:37 am

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
 
FutureFO
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RE: What Happens When A Ch11 Airline Folds?

Sat Aug 19, 2006 5:20 am

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



Sean
I Don't know where I am anymore
 
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Starlionblue
Posts: 17119
Joined: Fri Feb 27, 2004 9:54 pm

RE: What Happens When A Ch11 Airline Folds?

Sat Aug 19, 2006 5:54 am

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." - John Ringo