Chapter 11 Soon?

[Dilligas]

Before you all get yourself worked up about what may or may not happen in September, please ask yourself this question...

What has chip ever been correct about before?

Why anyone grants this person the slightest thread of credibility is beyond me.

He's just a tool used by his puppeteers to mess with the employees.

 

[700UW]

Someone has to show him that we see thru his charade and prove his diatribe as false facts.

 

[USA320Pilot]

According to the New York Times US Airways has been holding discussions with the ATSB regarding its risk of defaulting on the September 30 loan guarantee covenants, relaxing terms of the loan guarantee, and a potential bankruptcy filing.

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The ATSB has the right to waive the involuntary bankruptcy filing provision from the loan guarantee covenants if the Board believes this action would be in the best interests of the government and the taxpayer. Considering the single most important factor to complete a successful “formal reorganizationâ€￾ is maintaining cash flow, the ATSB could elect to waive the involuntary filing provision. This would permit US Airways to legally default on over $100 million in AFA and IAM pension payments, which would be the first step in terminating those plans by filing for Chapter 11 bankruptcy protection on September 12.

In addition, the September 12 date would give the company a few more weeks to “build its storyâ€￾ to the financial community that labor is on-board with the new business plan, prior to the potential September 30 deadline(s), if necessary. According to US Airways August 4 SEC filing, he company stressed the need to achieve its Transformation Plan during the third quarter "in light of the potential loss of financing for new regional jets, violation of debt covenants and significant collateralization events under certain credit card processing agreements," all of which have September 30 restrictions.

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Finally, as I understand it the Chapter 11 filing will preserve the stock, upon exit RSA could be issued more shares, the ATSB funds will be preserved, and DIP financing will not be required.

Respectfully,

USA320Pilot

 

[Bear96]

Finally, as I understand it the Chapter 11 filing will preserve the stock, upon exit RSA could be issued more shares, the ATSB funds will be preserved, and DIP financing will not be required.

Respectfully,

USA320Pilot

[post="167024"][/post]​

OK, you've said this before, and I've asked this before and never gotten an answer, so I'll ask again.

How will a Chapter 11 filing "preserve the stock?"

If I were a U creditor I would be very curious about what you mean by that, because in the event of a liquidation I would expect to be ahead of the equity holders for payment.

 

[hp_fa]

"In addition, the September 12 date would give the company a few more weeks to “build its storyâ€￾ to the financial community that labor is on-board with the new business plan, prior to the potential September 30 deadline(s), if necessary."

Yeah, like an IQ test question.

Labor is to on-board as a kidnapping victim is to a getaway car.

 

[USA320Pilot]

Bear96:

Bear96 asked: "OK, you've said this before, and I've asked this before and never gotten an answer, so I'll ask again. How will a Chapter 11 filing "preserve the stock?"

USA320Pilot comments: As I understand it from Wall Street sources, normally a stock is cancelled for a public company, but it does not have to be eliminated. If the debtor elects to keep the security in place, the stockholders will be creditors and receive a portion of their holdings.

The key for this restructuring is to not require DIP financing and to keep the security in place, which would allow RSA to maintain control of the airline. This issue is presumably being worked on by Dave Davis and Arnold and Porter.

Then upon emergence RSA would still maintain 51% control of the company and the Board could vote to issue RSA more shares so the pension fund can obtain its ROI.

I'm sorry if you asked me this question before, but I do not read every post.

Regards,

USA320Pilot

 

[robbedagain]

so in short term speaking, the airline would file ch.11 only to nullify the IAM and the AFA pension plans, instead of the United Airlines' way of doing it and to kill whatever union dont have contracts in place? this is the way i'm looking at it.

 

[700UW]

You are talking out your posterior, it cost hundreds of millions of dollars to go thru bankruptcy, it cost US over $400 million in the last go around. There is no way they can file, maintain their bills and pay for everything with the amount of cash on hand.

You are dreaming.

 

[PITbull]

USA320,

If ATSB gives the company relief on its convenant in order for U to voluntarily go into BK JUST to abrogate contracts and walk away from defined pensions and DUMP it on the PBGC, which still is an "arm" of the government, then I will say its a damn conspiracy against organized labor and for sure every airline under the sun that has a defined pension or any industry will dump their pensions to the PBGC's doorstep.


I believe Lorenzo filed for BK with CO on his second go-around and Congress stepped in and changed the BK codes.

I WILL BE THE FIRST TO START A CLASS ACTION AGAINST U IF THEY GO INTO BANKRUPTCY WITH THE ENDEAVOR YOU SPEAK OF ABOVE.



To preserve RSA Stock in BK, while aborgating agreements and pensions, is criminal!

 

[Dilligas]

hey Dilligas,

We missed you at RoachFEST. We had fun and MAYBE we accomplished something.

[post="167017"][/post]​

Thank you PB. Yes we did. Time will tell.


BTW, that's not my quote but you addressed me. That was "robbed again".

 

[PITbull]

Dilligas,

I guess this thread has just been "hyjacked" by the Roachfest folks....LOL...

You won't hear me complain about it though...

 

[Bear96]

As I understand it from Wall Street sources, normally a stock is cancelled for a public company, but it does not have to be eliminated. If the debtor elects to keep the security in place, the stockholders will be creditors and receive a portion of their holdings.

[post="167031"][/post]​

So they will be competing for the same chunk of the pie as the other creditors.

Wonder how the U Creditors Committee will feel about this. It would certainly make me very wary of lending U any money.

The key for this restructuring is to not require DIP financing and to keep the security in place...

Exactly. This would only work for a very few number of companies that enter Chapter 11, namely those that maybe have a little temporary hurdle (like potential future asbestos settlements) with an otherwise healthy long-term outlook.

Do you really think U is in that category? Do you really think U can go back into Ch.11 WITHOUT DIP financing, and successfully reemerge?

I don't.

 

[Dilligas]

Dilligas,

I guess this thread has just been "hyjacked" by the Roachfest folks....LOL...

PITBull,

Always remember, its "all about Bob". Every topic, every post... gets there eventually.

He's feeling quite chipper lately, evidently. Glad to know he misses me though.

 

[ClueByFour]

I read that DELL kept the India-based tech support for individual consumers, but routed their corporate clients' calls to a U.S.-based tech support center due to too many complaints over the accent thing.

[post="166880"][/post]​

It went much further than just the accent thing.

 

[funguy2]

Before you all get yourself worked up about what may or may not happen in September, please ask yourself this question...

What has chip ever been correct about before?

Why anyone grants this person the slightest thread of credibility is beyond me.

He's just a tool used by his puppeteers to mess with the employees.

[post="167010"][/post]​

Dilligas:

You ask a valid question. The answer, for me anyway, is that my very basic calculations, based on averages, led me to believe something must give by about mid-October of this year. Those calculations were posted on here in March after the ATSB-guaranteed loan pre-payment, and based on average burn rate of uinrestricted cash + known loan covenants. Combine that with the September 30th warning the company has given, and USA320Pilot has published, and I think there is a very real threat of something happening in September. How USA320Pilot, and his "secret sources" arrive at 9/11/04 is beyond me, however seems somewhat consistent with my calculations and statements made by the company.