This coming week AMR heads back to court. Quite a large docket of items if scheduled to be heard:
o Authorize the establishment for procedure to protect value of future net-loss carry-forward tax credits and to protect them as property assets of the estate.
o Approving proposal for AMR to make cash deposit payments as insurance collateral to insure the uninterrupted supply of utility services including phone, electricity, gas and water. Also prohibiting utilities from refusing, discontinuing or discriminating against the debtor during the Ch11 process.
o Approval to honor existing payment and processing agreements with consumer credit card and e-payment issuers, including Citibank for co-branded AAdvantage credit card.
o Lifting stay and granting Travelport LP
and Sabre Holdings authority to pursue its claims against AMR in Federal District Court.
o Lifting stay and allowing 11th Circuit to continue hearing pending case against AA
Pilot Retirement Benefits program regarding denial of claims from 2008-2011.
o Retention of Rothschild Inc banking group as master financial advisors and investment banker during Ch11 case. Since 2006 Rothschild has served as advisor to AMR in various capacities and is well versed with the evaluation of issues faces by the company. Rothschild will receive a minimum monthly fee, $15mil case completion fee, plus between 1-3% fee on any new debt raised.
o Lifting stay and allowing Cantor Fitzgerald & Co and others to continue litigation against AMR related to events of 9/11 as per the Congressional Air Transportation Safety and Stabilization Act
o Application by American Eagle to retain Bain & Company as strategic consultant including provide a labor-cost assessment to aid with corporate reorganization process at Eagle.
o Application by American Airlines to retain SkyWorks Capital LLC as aircraft and fleet restructuring advisor. SkyWorks would serve as advisors assisting AA
in respect to managing existing debt, lease obligations, maintenance status, market valuation while providing board level strategic insight and assist AA
define fleet strategies. 15-month contract would including a gross transaction fee on aircraft savings generated.
o Application to retain Perella Weinberg Partners as advisors with respect to labor agreements, pensions, and post-retirement plans.
o Application to employ McKinsey & Company US and Japan for broad management consulting services on industry operational and organizational matters including evaluation of future business plans and forecasting for a 5-year period.
o Authority to retain Ernst & Young LLP as ongoing auditor and tax advisors
o Establish process for compensation and reimbursement of expenses of approved professional service providers
o Application to retain Groom Law Group to serve as employee benefits advisor counsel
o Application to retain Debevoise & Plimpton LLP as counsel for aircraft related matters
o Application to retain Paul Hastings LLP as counsel on special labor matters
o Application to retain KPMG LLP and compliance and tax counsel
o Authorization to employ multiple firms used in the normal course of business to handle tax matters
o Application to retain Morgan Lewuis & Bockius LLP as special counsel for labor and employment litigation
o Application to employ Wel Gotshal & Manes LLP as special attorney on debtors protection and creditors rights matters
o Application to retain Deloitee Financial Advisory Services as consultants for bankruptcy related services in the areas of dealing with trading partners, cash management, communications, development of financial systems and procedures.
o Stay on excess of 200 proceedings related to injury or damage claims against AMR
o Extending time frame for filing of litigation claims against AMR until confirmation order date of Ch11 exit plan
o Rejection on leases on 17 aircraft and engines within 15-day of order granting such rejection (I posted tail numbers below).
o Further 30-day extension on deadline for AMR to file comprehensive schedule of assets, schedule of execuatory contracts and statement of financial affairs.
As follow up to some of the above topics, the flight attendants union APFA filed objections to the proposed retention agreements of Rothschild, SkyWorks Capital and Perella Wingberg Partners as being excessive and “without boundaries” and include fees without regard to outcome of the case including already stated objectives in making even deeper cuts on employee wages and benefits. Additionally TWU objected to American Eagle retaining Bain & Co as consultants based on unreasonable requested fees and the fact that Bain is already predisposed with “singular goal of extracting concessions” from AE
employees based on its previous work for AMR