LAXintl
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AMR Bankruptcy Court Thread

Tue Dec 06, 2011 1:33 am

Since we have active discussions going hypothesizing what the future of AA might end up being, or discussion things like delayed AE spinoff, lets have a thread covering the events and process of the corporations actual Ch-11 case.


To this end, today was a big initial day in the process with the required creditors committee being formed by the US Justice Dept. trustee assigned to the case.

3 of the 9 seats went to AA unions.

The selected creditor committee members are:
o AFL-CIO
o Allied Pilots Association
o Association of Professional Flight Attendants
o Bank of New York Melon
o Boeing Capital
o Hewlett-Packard Enterprises
o Manufacturers and Traders Trust Company
o Pension Benefit Guaranty Corporation
o Wilmington Trust Company.

Between the 9 members of the creditor committee, they hold about 2/3 of AA’s listed $29.6bil in debt and unfunded liabilities.


Court Docket – 11-15463
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gokmengs
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RE: AMR Bankruptcy Court Thread

Tue Dec 06, 2011 3:22 am

Hey Laxintl thanks for the thread. I have question though, All but one of the creditors makes sense to me. How does Hewlett Packard enterprises come in to play in the AA Bankruptcy?
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coopdogyo
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RE: AMR Bankruptcy Court Thread

Tue Dec 06, 2011 3:41 am

HP and AA have quite a close relationship. In 2009 HP and American teamed up to develop a reservation systems. HP must have provided financing as part of the the deal which is why they are on the list of largest creditors.
 
rjm777ual
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RE: AMR Bankruptcy Court Thread

Tue Dec 06, 2011 3:54 am

Hmmm HP as in Hewlett packard? i didn't know this!
Greetings from Dulles!
 
genybustrvlr
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RE: AMR Bankruptcy Court Thread

Tue Dec 06, 2011 3:56 am

Could have gone better for AA. Employee interests are not significantly outnumbered. Hopefully the financiers are all aligned...

o AFL-CIO
o Allied Pilots Association
o Association of Professional Flight Attendants
o Pension Benefit Guaranty Corporation


o Bank of New York Melon
o Boeing Capital
o Hewlett-Packard Enterprises
o Manufacturers and Traders Trust Company
o Wilmington Trust Company.
 
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seabosdca
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RE: AMR Bankruptcy Court Thread

Tue Dec 06, 2011 4:03 am

Quoting LAXintl (Thread starter):
Bank of New York Melon

Sounds sweet!  
 
tommytoyz
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RE: AMR Bankruptcy Court Thread

Tue Dec 06, 2011 10:38 am

Quoting genybustrvlr (Reply 4):
Employee interests are not significantly outnumbered.

1/3 employees ($10Billion) and the other 2/3 the others

They are all going to be fighting each other for whatever cash does remain. If their interest were aligned, the wouldn't need separate committees. Throw in AA's proposals to exit BK and the judge has a lot of decisions to make. The unions have to negotiate new contracts as pat of a new business plan, before the judge will let AMR exit BK.

Though I think the 2/3 creditors will see good value in receiving equity in the new AMR, I think only if the labor contracts and the rest of the new business plan looks good for AMR to be profitable and successful post BK. If the new AMR proposal is weak, with labor refusing to make strong concessions, the remaining creditors, which out vote the unions, might not accept new equity and instead ask the judge for an asset sale.

And since AMR has no debtor in possession financing in place, the amount of time AMR can remain in BK protection is limited to the cash AMR has. When cash runs too low, vendors will require immediate cash payments and/or cash reserve deposits. At that point, they won't be able to fuel their planes anymore and it'll be Pan Am time. I hope labor realizes this. Time is limited.
 
aaexecplat
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RE: AMR Bankruptcy Court Thread

Tue Dec 06, 2011 1:57 pm

First of all, thanks for opening this thread. Exactly what we needed to keep the focus on the major milestones in the bk process.

Quoting tommytoyz (Reply 6):
Though I think the 2/3 creditors will see good value in receiving equity in the new AMR, I think only if the labor contracts and the rest of the new business plan looks good for AMR to be profitable and successful post BK. If the new AMR proposal is weak, with labor refusing to make strong concessions, the remaining creditors, which out vote the unions, might not accept new equity and instead ask the judge for an asset sale.

Agreed. I do think that the plan AA is presenting is bound to be strong, since the major competitive drag on AA have been the debt payments, pension payments, and other labor costs (unproductive work force). Assuming the judge is on board with AA's labor contract proposals, everything should be peachy. Afterall, the judge can impose work contracts, so in my mind, as long as AA is putting forward labor contract proposals that are in line with AA's legacy competitors, I suspect the unions will not be able to negotiate for much other than equity...
 
gizmonc
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RE: AMR Bankruptcy Court Thread

Tue Dec 06, 2011 2:15 pm

I also was curious about seeing HP listed as well. Anyone have any details about what the deal was between AA and HP correct me if I am wrong but at one point AA (AMR) owned Sabre. I always thought that Sabre was the cadillac of airline reservatons systems. AMR sells Sabre and then tried to join with HP and that goes south. AA trouble started after 9/11 and this was 8 years later. AA was in deep dodo at the time. Sounds like this was another failed attempt from the previous management which blew a huge amount of cash.
 
Burkhard
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RE: AMR Bankruptcy Court Thread

Tue Dec 06, 2011 3:04 pm

If HP takes an active part and shows interest into getting the company and its targets running again, this is a sensationally good news since there is a chance the greedy vampires who with their ridicoulous profits and interest rates are the reason for AA finacial problems ( and all of the current economical crisis ) are not in the majority.

Boeings role may be interesting, they want to sell MAX instaed of the NEOs...
 
LAXintl
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RE: AMR Bankruptcy Court Thread

Tue Dec 06, 2011 4:09 pm

Quoting genybustrvlr (Reply 4):
Could have gone better for AA. Employee interests are not significantly outnumbered. Hopefully the financiers are all aligned...

I'm not sure -- you have essentially three bond holder/creditors and two industry vendors.

The creditors obviously will look to cover their balances to the highest percentage possible, while the vendors will look to keep AMR as an ongoing client and make as much money from it as possible.

I could easily see Boeing and HP aligned with labor if they come up with some deals that keeps the cash cow running for years to come regardless of what the bond holders might want to recover today.

As APA said today, it was a major achievement to secure strong labor representation on the committee and that it bodes well to help ensure the appropriate consideration is given to subjects effecting employees.
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xdlx
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RE: AMR Bankruptcy Court Thread

Tue Dec 06, 2011 4:22 pm

Wonder if APA position is still DL+ $1.... Given BK their position is now about DL + $0.33.
They better wake up and smell the coffee! They are not fighting Arpey anymore.
 
LAXdude1023
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RE: AMR Bankruptcy Court Thread

Tue Dec 06, 2011 4:36 pm

There was an article that I came across today regarding this:

From the APA:

"There hasn't been a bankruptcy yet where the employees haven't taken the brunt of the concessions that end up coming out of the backside,” said First Officer Scott Shankland, secretary-treasurer of the Allied Pilots Association. “So this step of us getting on the creditors committee is a great first step in ensuring that we're going to be able to look out for the interests of our pilots."

"Our job is to defend the interests of the pilots to the greatest extent possible,” he said. “But we also want to return the airline to profitability. We want this airline to emerge from bankruptcy as the great carrier that it once was."

From a BK analyst:

"Dallas bankruptcy attorney Mark Ralston said employees will certainly “take a hit” in the bankruptcy process -- with everything from pensions to contract and even flight benefits up in the air."

"I've seen in other airline cases where the unsecured creditors don't get paid in any cash,” he said. “They get, basically, stock in the new airline. So there's going to be a reorganized American Airlines out there, and all the unsecured creditors might get paid in shares."

http://www.nbcdfw.com/news/business/135072263.html
It is what it is...
 
LAXintl
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RE: AMR Bankruptcy Court Thread

Tue Dec 06, 2011 4:50 pm

AA announced some management changes. Horton is cleaning house installing his own lieutenants.

Retiring December 31st.
-Robert W. Reding , Executive Vice President – Operations
-Mark L. Burdette , Vice President – Employee Relations
-Monte Ford , Senior Vice President and Chief Information Officer (CIO)

Promotions
-James B. Ream is named Senior Vice President – Operations, assuming additional responsibility for Flight Operations, Operations Planning & Performance, Operations Finance & Planning, and the Safety, Security and Environmental Departments, in addition to his current role overseeing Maintenance & Engineering (M&E)
-Denise Lynn , currently Vice President, Flight Service, will move to the role of Vice President Employee Relations
- Maya Leibman , currently President of the AAdvantage® Loyalty Program, is promoted to Senior Vice President and CIO
-Beverly Goulet is named Chief Restructuring Officer, in addition to her continuing role as Vice President Corporate Development and Treasurer


News:
http://finance.yahoo.com/news/Americ...nnounces-prnews-327754597.html?x=0
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LAXintl
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RE: AMR Bankruptcy Court Thread

Tue Dec 06, 2011 7:34 pm

Regarding the creditors committee I had someone remind me of how things were at United.

They had a 13 member creditor committee with labor only having 2 seats.

Seems to me the composition of AMRs committee will give labor a huge voice in the process in comparison.


And now AMR put out a pretty bland statement about the formation of the committee:

We look forward to working with the Committee appointed by the US Trustee.

An American Airlines with an industry competitive cost and debt structure is in the best interests of the unsecured creditors represented by the Committee and all of the Company's stakeholders.

We are committed to working as quickly and efficiently as possible to appropriately restructure American so that it can emerge from Chapter 11 well-positioned to assure the Company's long term viability and reaffirm its position as a leader in the airline industry.
From the desert to the sea, to all of Southern California
 
tommytoyz
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RE: AMR Bankruptcy Court Thread

Tue Dec 06, 2011 7:49 pm

Quoting aaexecplat (Reply 7):
Afterall, the judge can impose work contracts

I don't think it's that simple.

Quoting LAXintl (Reply 10):
while the vendors will look to keep AMR as an ongoing client and make as much money from it as possible.

If vendors get too little in equity and think they get much more in a liquidation, they might ask the judge for that. Vendors know that someone will take AA's place eventually, be it a post BK AA or some other entity.

Quoting LAXintl (Reply 10):
As APA said today

Union leadership always does good, according to them. But it doesn't matter how many committees they have, but rather how much $$ they are each owed relative to other creditors. Comparing AMR bk to other BKs can be misleading, because every BK is different with a very different set of circumstances. The BK laws have also changed a lot. One thing has not changed, the need for money to continue operating.

If labor digs their heels in deep and drags their feet and drags this out, AMR could run out of money to operate. It's not impossible.
 
aaexecplat
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RE: AMR Bankruptcy Court Thread

Tue Dec 06, 2011 9:15 pm

Quoting tommytoyz (Reply 15):
If labor digs their heels in deep and drags their feet and drags this out, AMR could run out of money to operate. It's not impossible.

I refuse to believe that the employees can cause AMR to liquidate with 6 other vested interest parties at the table and in the face of overwhelming evidence that competing carriers' employees are more productive, as well as a judge who is able to impose contracts and terms in this bk process.

If you have particular reason to doubt the ability of the judge to impose contracts and terms, please share.
 
slvrblt
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RE: AMR Bankruptcy Court Thread

Tue Dec 06, 2011 11:02 pm

Quoting aaexecplat (Reply 16):
......in the face of overwhelming evidence that competing carriers' employees are more productive, as well as a judge who is able to impose contracts and terms in this bk process.

If you have particular reason to doubt the ability of the judge to impose contracts and terms, please share.

Exactly correct. Precisely as it should be and hopefully the judge will look very unfavorably on a single labor group that continues to want all the labor dollars they can squeeze, at the expense of the company, and other employees.
Newsflash to pilots - there's only so many bucks a company can spend on overall payroll and continue to operate if that workforce is not efficient. As usual, the APA mentions only what's good for THEIR members.....they forget EVERYONE, not just them, gave up lots of things post 9-11. No, for them, it's ME, ME, ME. They sort of forget the reservation agents, ticket agents, gate agents, and others that make those planes they fly have fannies in seats and bags on board.
I wasn't a particular fan of Arpey, but I remember he had said more than once it wasn't employee pay he considered to be a problem; it was the PRODUCTIVITY those dollars bought.
..everything works out in the end.
 
klkla
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RE: AMR Bankruptcy Court Thread

Tue Dec 06, 2011 11:30 pm

Quoting aaexecplat (Reply 16):
I refuse to believe that the employees can cause AMR to liquidate with 6 other vested interest parties at the table and in the face of overwhelming evidence that competing carriers' employees are more productive, as well as a judge who is able to impose contracts and terms in this bk process.

If you have particular reason to doubt the ability of the judge to impose contracts and terms, please share.

The judge definitely has the right to impose a new contract but could AA afford any strikes at this time?

It is still in AA's best interest to try and negotiate a contract. If you look at the most recent BK filings by DL, NW, US and UA they all negotiated their labor agreements and did not have to resort to having a jusge impose a contract. If you think's AA's labor relations are bad now just think of what they would be like after that.
 
LAXdude1023
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RE: AMR Bankruptcy Court Thread

Tue Dec 06, 2011 11:41 pm

Quoting klkla (Reply 18):
The judge definitely has the right to impose a new contract but could AA afford any strikes at this time?

They would be sent by to work by the government like they have in the past if they strike during Chapter 11.
It is what it is...
 
slvrblt
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RE: AMR Bankruptcy Court Thread

Tue Dec 06, 2011 11:56 pm

Quoting LAXdude1023 (Reply 19):
They would be sent by to work by the government like they have in the past if they strike during Chapter 11.

Absolutely; President Clinton did it before when they struck. That strike lasted about 5 minutes before the Executive Order came down.
It wouldn't take an Executive Order this time. The order to continue to work would come from the Judge's Bench, and being in contempt of court = instant jail time.
..everything works out in the end.
 
xdlx
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RE: AMR Bankruptcy Court Thread

Tue Dec 06, 2011 11:59 pm

Quoting slvrblt (Reply 20):

Really..... the whole company going to jail?
 
slvrblt
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RE: AMR Bankruptcy Court Thread

Wed Dec 07, 2011 12:06 am

Quoting xdlx (Reply 21):
Really..... the whole company going to jail?
Quoting xdlx (Reply 21):
Quoting LAXdude1023 (Reply 19):
They would be sent by to work by the government like they have in the past if they strike during Chapter 11.

Hmmm. Follow the thought. Strike.....judicial defiance.....labor workgroup guilty of said defiance....hope that helps you.
..everything works out in the end.
 
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fxramper
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RE: AMR Bankruptcy Court Thread

Wed Dec 07, 2011 12:28 am

+67% increase in common stock today.   
 
tommytoyz
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RE: AMR Bankruptcy Court Thread

Wed Dec 07, 2011 1:09 am

Quoting aaexecplat (Reply 16):
If you have particular reason to doubt the ability of the judge to impose contracts and terms, please share.


§ 1113. Rejection of collective bargaining agreements
http://www.law.cornell.edu/uscode/usc_sec_11_00001113----000-.html
The judge has no such ability. However, the judge does have the ability to cancel the existing contract 100% in its entirety, but he can not impose a new one nor an amended the old one against labor objections. If a contract is cancelled, I guess they could strike, since there is no contract and therefore no breach of a contract if they do. And aren't the pilots out of contract anyway, or was it extended?

Both sides need to cooperate here. Only interim changes are permitted by the trustee, awaiting the final ruling to either reject the old contract in its entirety - or keep it, in its entirety.
 
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Revelation
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RE: AMR Bankruptcy Court Thread

Wed Dec 07, 2011 1:34 am

Quoting LAXdude1023 (Reply 12):
"There hasn't been a bankruptcy yet where the employees haven't taken the brunt of the concessions that end up coming out of the backside,” said First Officer Scott Shankland, secretary-treasurer of the Allied Pilots Association.

Concessions that end up coming out the backside?

Oy!

Seems someone should proofread this stuff before they send it out....
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xdlx
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RE: AMR Bankruptcy Court Thread

Wed Dec 07, 2011 1:39 am

Quoting Revelation (Reply 25):

How dare you ....he is the Sec-Treasurer of the best union in the entire industry!
 
tommytoyz
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RE: AMR Bankruptcy Court Thread

Wed Dec 07, 2011 1:50 am

Quote:
"Courts have recognized the employees' right to strike in situations where debtors have obtained court orders rejecting collective bargaining agreements under §1113, except that an arbitration agreement may be enforced via injunction where the underlying collective bargaining agreement has a mandatory grievance arbitration procedure and the strike is triggered by issues subject to this mandatory arbitration procedure."

"At one minute past midnight on July 21, 1985, more than 8,000 steelworkers
struck the Wheeling-Pittsburgh Steel Corporation (UWheelingPitt").
This action represented the first strike in the basic steel industry
since 1959/1 and it occurred within days of Bankruptcy Judge 'Vanen Bentz's
decision to permit rejection."

"As late as September 1985, analysts were
describing the company as "formidable competition if it settles the strike. ,
But as the strike dragged on for nearly 100 days, the company's very survival
was put in doubt. 'Vhether the strike eventually would have forced Wheeling-
Pitt into liquidation remains an unresolved question, since the company's
major shareholder brought in a new management team that negotiated a strike
settlement agreement."

End quotes

The problem for AMR as I see it, is that cash and time is limited. Even if the Unions lose the legal arguments, they could drag this out beyond the point of no return for AMR. AMR will only survive if the unions are reasonable in their demands and do so without much delay.
 
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yellowtail
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RE: AMR Bankruptcy Court Thread

Wed Dec 07, 2011 4:00 am

What are the odds that Parker and Co come up with a sweet proposal for AA that includes (US) shedding its "west" problems (my bet would be to NK or B6) and merging with AA?

Quoting LAXintl (Reply 13):
Retiring December 31st.
-Robert W. Reding , Executive Vice President – Operations
-Mark L. Burdette , Vice President – Employee Relations
-Monte Ford , Senior Vice President and Chief Information Officer (CIO)

Promotions
-James B. Ream is named Senior Vice President – Operations, assuming additional responsibility for Flight Operations, Operations Planning & Performance, Operations Finance & Planning, and the Safety, Security and Environmental Departments, in addition to his current role overseeing Maintenance & Engineering (M&E)
-Denise Lynn , currently Vice President, Flight Service, will move to the role of Vice President Employee Relations
- Maya Leibman , currently President of the AAdvantage® Loyalty Program, is promoted to Senior Vice President and CIO
-Beverly Goulet is named Chief Restructuring Officer, in addition to her continuing role as Vice President Corporate Development and Treasurer

Where is Dolara in all of this?
When in doubt, hold on to your altitude. No-one has ever collided with the sky.
 
commavia
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RE: AMR Bankruptcy Court Thread

Wed Dec 07, 2011 4:05 am

Quoting LAXintl (Reply 14):
Regarding the creditors committee I had someone remind me of how things were at United.

They had a 13 member creditor committee with labor only having 2 seats.

Seems to me the composition of AMRs committee will give labor a huge voice in the process in comparison.

"Huge voice?" Please.   

There are various vested interests aligned to support AMR's successful exit from reorganization because there are literally billions in future cash flows for these creditors on the line. Having three labor unions take up a minority of the seats on the creditors committee, which only gets to fight over what's left after secured debt holders get their claims negotiated, hardly gives them a "huge voice."

I am inclined to believe, like many people smarter than me keep saying, that this is no better or worse than United, or Delta, or the other airline bankruptcies, and I'm further inclined to believe that some want to continue to try and make it sound worse.

Quoting yellowtail (Reply 28):
Where is Dolara in all of this?

I doubt he'll ever leave, and I doubt they'll ever get rid of him. He's an institution with such deep roots and connections in Latin America that they would be stupid to screw that up.
 
genybustrvlr
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RE: AMR Bankruptcy Court Thread

Wed Dec 07, 2011 4:32 am

Quoting LAXintl (Reply 10):
The creditors obviously will look to cover their balances to the highest percentage possible, while the vendors will look to keep AMR as an ongoing client and make as much money from it as possible.

I could easily see Boeing and HP aligned with labor if they come up with some deals that keeps the cash cow running for years to come regardless of what the bond holders might want to recover today.
Quoting LAXintl (Reply 14):
Seems to me the composition of AMRs committee will give labor a huge voice in the process in comparison.

Which is exactly the reason for my comment. Labor is potentially way over represented IMO and will be an impediment to meaningful cuts.
 
caliboy78
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RE: AMR Bankruptcy Court Thread

Wed Dec 07, 2011 5:36 am

I'm inclined to say that all the unions are there to try and make the process as painful as they can possibly can. I'm not too savvy in the whole BK process so someone please shine some light, but my understanding is that AMR will present a plan and if the judge thinks is good enough for the companys' future. The the unions can cry and whine all they want but the judge have the ultimate saying.

Like I said before I'm not too savvy so if I'm wrong please educate me.   
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HPRamper
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RE: AMR Bankruptcy Court Thread

Wed Dec 07, 2011 5:46 am

Quoting yellowtail (Reply 28):
What are the odds that Parker and Co come up with a sweet proposal for AA that includes (US) shedding its "west" problems (my bet would be to NK or B6) and merging with AA?

What "west" problems?
 
masseybrown
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RE: AMR Bankruptcy Court Thread

Wed Dec 07, 2011 5:52 am

Quoting LAXintl (Thread starter):
The selected creditor committee members are:
...
o Pension Benefit Guaranty Corporation

Head of the PBGC is ... drum roll ... none other than little Joshie Gotbaum, the sticky-fingered, court-appointed trustee of Hawaiian during their bankruptcy. Remember him? The one who billed Hawaiian over a million for year's temporary rental of a waterfront house on Oahu? The one who tried to collect an $8 million incentive award for stuff Dunkerley did?

Let's see ... he'll appoint himself to the committee ... demand an ten-room apartment on Central Park South ... bill AMR $1.5K an hour for committee services ... and then demand a multimillion incentive award for settling the pension questions in strict accordance with the law.
 
tommytoyz
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RE: AMR Bankruptcy Court Thread

Wed Dec 07, 2011 7:56 am

Quoting caliboy78 (Reply 31):
he the unions can cry and whine all they want but the judge have the ultimate saying.

No. The unions have a very large say for several reasons:

1. They are large creditors ($10 Billion)
2. The Judge can not impose permanent labor contracts, though he can cancel existing ones
3. Unions can strike without a contract if the contracts are cancelled, not considering the politics of the Railway Labor Act

I hope labor thinks like executives (I will not hold my breath though), and realizes the value of equity in a profitable company in exchange for salaries and productivity.

At a glance, the big difference I see in this BK over others, is that there is no debtor in possession. AMR is funding this BK from their remaining cash. Unless one can be found now, I suggest everyone look at the unrestricted cash level, rather than the clock. Anyone want to calculate that?
 
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yellowtail
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RE: AMR Bankruptcy Court Thread

Wed Dec 07, 2011 11:39 am

Quoting HPRamper (Reply 32):
What "west" problems?

The two pilot factions. If you could sell off a portion of the airline (i.e the west, PHX) to someone like B6 or AS....then those pilot union problems can go away...in theory.

PHX would make a great complementary hub for NK, B6, AS...but in a hypothetical AA merger, it is made redundant by LAX. PHL would also be in the same position in a US / AA merger.....with AA/US hubs at DCA and JFK sandwiching it.
When in doubt, hold on to your altitude. No-one has ever collided with the sky.
 
LAXdude1023
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RE: AMR Bankruptcy Court Thread

Wed Dec 07, 2011 1:27 pm

Quoting tommytoyz (Reply 34):

Technically, they can strike. But they would more than likely be ordered back to work. Clinton did it in the 90s and given they are in chapter 11, I have no doubt it would be done.
It is what it is...
 
xdlx
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RE: AMR Bankruptcy Court Thread

Wed Dec 07, 2011 1:29 pm

Quoting yellowtail (Reply 35):

Are they under two certificates still?
 
PIEAvantiP180
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RE: AMR Bankruptcy Court Thread

Wed Dec 07, 2011 1:36 pm

Can someone explain how much extra cash AMR is burning on a daily/monthly basis now that they are in bankruptcy then they would be using on regular operating basis? or is it a set amount of money that a company has to pay for lawyers and court fees? Everybody keeps saying if they dont get it done soon they will run out of money. If they had 4.1 billion to start with and they are using up a billion a year would it not give them at least 2 years before their cash gets to low levels. Any detailed explanation on how a bankrupcy plays on a companys cash would be greatly appreciated.
 
HPRamper
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RE: AMR Bankruptcy Court Thread

Wed Dec 07, 2011 4:37 pm

Quoting yellowtail (Reply 35):
The two pilot factions. If you could sell off a portion of the airline (i.e the west, PHX) to someone like B6 or AS....then those pilot union problems can go away...in theory.

PHX would make a great complementary hub for NK, B6, AS...but in a hypothetical AA merger, it is made redundant by LAX. PHL would also be in the same position in a US / AA merger.....with AA/US hubs at DCA and JFK sandwiching it.

The pilot union problems should go away in a matter of time anyway as the court has already ruled against USAPA, and as the airline has made plenty of money notwithstanding I don't think they will base their decision on the childlike behavior of one workgroup. And I don't think any other airline would be guaranteed as much success at PHX as US currently does. The market knows they are still HP at heart and they are the hometown airline. B6 and AS would have to build a loyal flyer base from scratch and I believe WN would eat them alive while they tried to organize.

PHL is by no means in as bad a spot as everyone seems to think it is. It's much more of a monopoly market than JFK is. AA is not even the number one carrier at JFK, not by a long shot. DCA also cannot be considered a true hub with its perimeter rule a serious hamstring to long-distance flights.
 
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coronado
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RE: AMR Bankruptcy Court Thread

Wed Dec 07, 2011 5:04 pm

Can AA's credit card processors require cash hold-backs now that AA has filed Ch 11, similarly to what First Data did to Frontier 3 years ago? AA annual report in various spots (such as in the middle of page 11 of their 2010 annual report) has statements warning that their liquidity could be severely affected in the event their credit card processors impose cash holdbacks? What is the risk of credit card processors taking such a step?
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FlyASAGuy2005
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RE: AMR Bankruptcy Court Thread

Wed Dec 07, 2011 5:23 pm

Quoting Coronado (Reply 40):

Its directly tied to their cash on hand from what another member explained to me in another thread and according to the agreement they're not there yet. But, they can require hold backs in the future if they continue to burn through cash at the rate that they are. DL's processor required a hold back right before their bk. Around the time DFW was closed and the ill-fated Simplifares was introduced. They had to borrow $500M from AmEx to cover it. AmEx came to their rescue several times which is why they (American Express) have the SkyMiles program by its balls.
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AAR90
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RE: AMR Bankruptcy Court Thread

Wed Dec 07, 2011 8:23 pm

Quoting caliboy78 (Reply 31):
Like I said before I'm not too savvy so if I'm wrong please educate me.

In its simplest form AA (the bankrupt company) and its creditors (essentially every entity it has a contract with) are required to bargain in "good faith" to reach a mutually agreeable solution. That solution (the new plan) is presented to the Creditors' Committee and if approved, it is then presented to the bankruptcy court (the judge) who may accept, reject or modify it. If all parties can not come to a mutually agreeable solution to present to the court, they get to "argue" their positions in front of the judge and he will (eventually) reach a decision. Remember, this is a very very simple description and the real world is never ever that simple.   
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seabosdca
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RE: AMR Bankruptcy Court Thread

Wed Dec 07, 2011 8:28 pm

Quoting AAR90 (Reply 42):
Remember, this is a very very simple description and the real world is never ever that simple.

For those with no exposure to the process... here's a description of building an airplane that captures the wrinkles about as well. It's mind-numbingly complicated and will keep entire lawfirms in champagne for a couple years.

"Make a center wing box and build a fuselage around it. Throw in a few systems and a cockpit. Stick on some wings and stabilizers. Then put on engines. Paint the thing and add an interior. Fly it once and give it to the customer."

 

[Edited 2011-12-07 12:30:54]
 
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par13del
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RE: AMR Bankruptcy Court Thread

Wed Dec 07, 2011 9:30 pm

Quoting aaexecplat (Reply 16):
If you have particular reason to doubt the ability of the judge to impose contracts and terms, please share.
Quoting klkla (Reply 18):
The judge definitely has the right to impose a new contract but could AA afford any strikes at this time?
Quoting LAXdude1023 (Reply 19):
They would be sent by to work by the government like they have in the past if they strike during Chapter 11.
Quoting slvrblt (Reply 22):
Hmmm. Follow the thought. Strike.....judicial defiance.....labor workgroup guilty of said defiance....hope that helps you.

Reality is that if the judge does mandate that the striking workers go back to work they always have the right to resign from the union and or quit the job, at the end of the day we are talking about people, a union is not a machine.
Besides, why would a company struggling to get back on its feet want a bunch of disgruntled workers on their premises, managers are going to be over their shoulders all day ensuring that they play nice?

Not sure why the employees want a seat on the committee anyway, unlike the pilots who took their money and ran, those who remained on the jobs probably still believe that AA will never file for Chpt. 11, or wipe out their pensions, or impose draconian labour rules etc. etc. etc. are such folks really up to the complex negotiations and hard choices to be made? Truly a question, not a bash.
 
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RE: AMR Bankruptcy Court Thread

Thu Dec 08, 2011 12:08 am

Two VP & one CIO annunced their retirements today effective DEC31.

The exodus has started......
 
LAXintl
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RE: AMR Bankruptcy Court Thread

Tue Dec 13, 2011 5:31 pm

American Airlines goes back to court today, the first time since its initial BK filing hearing last month.

On the docket today are over 200 motions from the airline and creditors meant to allow management to continue business as usual while providing company maximum operational and financial flexibility. One of the larger topics that is expected to be covered is affirming planned new plane deliveries in the next few years with 32 previously scheduled for 2012.
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LAXdude1023
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RE: AMR Bankruptcy Court Thread

Tue Dec 13, 2011 5:34 pm

Quoting LAXintl (Reply 46):
On the docket today are over 200 motions from the airline and creditors meant to allow management to continue business as usual while providing company maximum operational and financial flexibility. One of the larger topics that is expected to be covered is affirming planned new plane deliveries in the next few years with 32 previously scheduled for 2012.

Yep. American got pre approval to recieve a batch of new planes in 2012 from the BK court judge.

http://www.nbcdfw.com/news/local/Jud...-Receive-New-Planes-135482408.html
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michman
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RE: AMR Bankruptcy Court Thread

Wed Dec 14, 2011 4:13 am

Quoting klkla (Reply 18):
It is still in AA's best interest to try and negotiate a contract. If you look at the most recent BK filings by DL, NW, US and UA they all negotiated their labor agreements and did not have to resort to having a jusge impose a contract. If you think's AA's labor relations are bad now just think of what they would be like after that.

I don't think the NW FA's ever approved the contract they were working under during the NW bankruptcy. My understanding is their PFAA negotiated a new tentative contract with NW in March 2006 with a cost savings target of $195 million as authorized by the bankruptcy judge. The FA's didn't like it and voted to toss the PFAA for the AFA in July of 2006. The AFA negotiated a new tentative contract with NW, but the FA's voted it down. In the interim, the judge ruled that NW could impose the tentative contract negotiated back in March 2006 with the PFAA if the FA's turned down the new tentative contract negotiated by the AFA. Ultimately, that is what NW ended up doing. The FA's did barely approve a new contract in May 2007 just a couple of days before NW exited bankruptcy. The AFA had negotiated a settlement claim with NW during bankruptcy and the judge had ruled it would be void unless the FA's had a new contract in place before NW exited bankruptcy.

[Edited 2011-12-13 20:29:36]
 
norcal
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RE: AMR Bankruptcy Court Thread

Wed Dec 14, 2011 2:44 pm

Found this information in another forum:

Here's a question, why does AMR own a private residence located at 16 Cottesmore Gardens London W8? Which executive is this for? I wonder what other kind of wasteful spending is going to be uncovered in the bankruptcy process.


Page 58
http://www.amrcaseinfo.com/pdflib/4_15463.pdf