Is USAirways hostile takeover Of AA for Real?

[700UW]

So now your speaking for the reporter? Funny this is in the first part of the article, you know the lead.

US Airways CEO Doug Parker is negotiating directly with AMR bondholders outside of the court process, and David Tepper’s Appaloosa Management LP has teamed with other investors to push for a bigger payoff. Fort Worth, Texas-based AMR is pursuing a stand-alone strategy that includes boosting revenue, a course that Vicki Bryan of New York-based debt researcher Gimme Credit LLC said isn’t seen as viable by bond owners.

“The fact that the bonds are recovering shows that the unsecured creditors think there will be a deal,” Bryan, a senior bond analyst, said in a telephone interview. “No one is confident about their revenue generation plan. It’s worth more only on the idea that someone else will buy it.”

Your really grasping, unreal.

 

[WorldTraveler]

No, I am not grasping. Investors don't care HOW they get their recovery. They only care that they get it one way or the other. Retaining the DB plans in a frozen state dramatically reduces claims on AMR's estate and increases the recovery that bondholders could get, all other things being equal. Removing billions of dollars in claims against AMR has a far larger effect than what Parker could possible negotiate.

Face it... as it becomes apparent that AA will negotiate new agreements with its labor groups - even under duress - Parker will turn to yet one more creditor group to try to win AA... but the laws continue to favor AA's ability to emerge as an independent company.

Grasping is contining to deny that laws favor AA's emergence as an independent company - and there has been nothing that has happened in their case to prove it will be any different this time around - just like it was when US, UA, DL, and NW emerged on their own terms.

 

[700UW]

AA will not negotiate new deals, the are done negotiating and they are out for votes, the will implement once the judge abrogates if they remaining agreements arent ratified.

Two the pension deal was announced months ago, its nothing new, so that part isnt a factor.

The process doesnt favor AA or US, its what the UCC and the Judge will think that will get the creditors the most money and make AA successful.

How many chapter 11 cases on the airlines have you been in?

ZERO, thats right, I have been in two and was directly involved in US' second case.

 

[WorldTraveler]

The law gives the debtor the right to create its OWN restructuring plan - that is why AMR has gained the ability to extend its period of exclusivity to a year after it filed. The creditors absolutely cast the die but mgmt works for the creditors and mgmt has multiple opportunities to revise their plan before others are given the opportunity to provide competing plans.

If AA can't negotiate new deals, then an airline who isn't even in the process certainly has no standing in the case - their one million dollars worth of debt won't make a hill of beans worth a difference. Perhaps you missed the judge tell US' lawyers to sit down during the current case?

Responding to the thread title, yes, US' efforts to attempt to build a case are real; their standing to do so are not. As has been said multiple times and AA mgmt has now reiterated, US will get a chance to present a case - and it will be put against those that AA consider potential merger partners, an AA standalone plan, and likely an unsolicited submission or two from "the outfield."

The fact that we are discussing the basics of how BK proceedings operate 320 posts into this thread shows it is still far from clear to many how the process works.

I welcome you to revisit this thread in 9-12 months and see if what I have said doesn't prove to be true.
Your statement shows that you have no knowledge of what experience I have had.

 

[700UW]

They dont get multiple times, they get through the exclusivity period and thats it.

The UCC and the Judge have the power, AA can present any plan they want, the UCC and Judge can shoot it down.

Parker is courting people he needs too and Horton isnt, Horton is the one who is trashing US and Parker, and Parker is doing what he has to do, he all ready has the three union seats on board and is working on getting more.

Its all going to boil down to who is going to give the creditors the opportunity to get the most money.

And funny how you ignore the fact that I pointed the pension deal took place months ago and yet you fail to admit you were wrong.

 

[WorldTraveler]

What pension deal? You mean where the PBGC convinced the creditors that they would receive better return if AMR froze its pensions instead of terminate them. Are you implying that US somehow orchestrated that?

Mgmt does not have a static plan. They have the ability to continue to refine it and that is what they are doing during their period of exclusivity. The changes to the pension plan are one example. AA is going to get last from its labor than what it originally asked - that is yet another variation. Mgmt continues to modify their standalone plan.

Parker HAD three union leaders who supported him in putting pressure on the AA mgmt to deal; it is anyone's guess if AA labor will remain interested in what US has to offer - but it is actually rather NOT likely that they will be interested in US if they negotiate terms w/ the company. Get back w/ me if I am shown to be wrong.

Yes, it is about giving the creditors the greatest return... but the law gives AMR mgmt the exclusive right to come up w/ a better plan than what AMR standalone would provide - and AMR is being forced to consider other alternatives which they can think of and US will most certainly be in that group of comparisons. When you throw in a few unsolicited proposals which are certain to emerge, AA will have gone through the most extensive comparison of its business plan to other alternatives that has ever been done in the US airline industry.

If Parker can top what AMR can do on a standalone basis - he'll win and he should. But given that AA is producing top of the industry revenue growth and is moving forward w/ the pieces necessary to emerge on an independent basis, there is still no reason to think AA will not emerge on their own - as much as you and others don't want to see that.

 

[PITbull]

The law gives the debtor the right to create its OWN restructuring plan - that is why AMR has gained the ability to extend its period of exclusivity to a year after it filed. The creditors absolutely cast the die but mgmt works for the creditors and mgmt has multiple opportunities to revise their plan before others are given the opportunity to provide competing plans.

If AA can't negotiate new deals, then an airline who isn't even in the process certainly has no standing in the case - their one million dollars worth of debt won't make a hill of beans worth a difference. Perhaps you missed the judge tell US' lawyers to sit down during the current case?

Responding to the thread title, yes, US' efforts to attempt to build a case are real; their standing to do so are not. As has been said multiple times and AA mgmt has now reiterated, US will get a chance to present a case - and it will be put against those that AA consider potential merger partners, an AA standalone plan, and likely an unsolicited submission or two from "the outfield."

The fact that we are discussing the basics of how BK proceedings operate 320 posts into this thread shows it is still far from clear to many how the process works.

I welcome you to revisit this thread in 9-12 months and see if what I have said doesn't prove to be true.
Your statement shows that you have no knowledge of what experience I have had.

I happen to agree with you.

 

[700UW]

http://www.bloomberg.com/news/2012-07-28/amr-starts-merger-review-process-sends-papers-to-us-airways.html

 

[PITbull]

http://www.bloomberg...us-airways.html

"The document was created “to govern a fair and objective process of comparing all strategic alternatives” to American’s own plan to emerge from bankruptcy on a stand-alone basis, according to the memo"


700:

this comment is very important and basically says it all...giving the creditor's the benefit that AA is considering all alternatives. Nonetheless, they are continuing on their own path to emerge from BK as a stand alone carrier. The exculsivity extension granted by the Judge really speaks volumes that AA has all intentions of implementing their restructuring plan and emerging from BK solo.. and the judge is giving them that opportunity.
Keep in mind, that unlike other bankruptcies that have occured, AA funded their own bankruptcy. The reality is that US Airways needs AA more than the other way around.... and this is so blatantly obvious. Douggie tried to capture DL in 2006 while DL was in BK, too.

This is standard MO for Douggie to keep trying to marry a legacy, and AA is the last one.

 

[WorldTraveler]

"The document was created “to govern a fair and objective process of comparing all strategic alternatives” to American’s own plan to emerge from bankruptcy on a stand-alone basis, according to the memo"

this comment is very important and basically says it all...giving the creditor's the benefit that AA is considering all alternatives. Nonetheless, they are continuing on their own path to emerge from BK as a stand alone carrier. The exculsivity extension granted by the Judge really speaks volumes that AA has all intentions of implementing their restructuring plan and emerging from BK solo.. and the judge is giving them that opportunity.
Keep in mind, that unlike other bankruptcies that have occured, AA funded their own bankruptcy. The reality is that US Airways needs AA more than the other way around.... and this is so blatantly obvious. Douggie tried to capture DL in 2006 while DL was in BK, too.

Of course Doug Parker doesn't really want his plan to be subjected to a comparative scrutiny w/ AA's standalone plan and a bunch of other options. That's probably why he has said that there is a point in the AA BK process at which US doesn't want to be involved anymore - because once AA demonstrates that it can emerge on a standalone basis, the price of buying them out gets a whole lot larger.

let's also just say that AA borrowed the money for their BK before they filed rather than waiting until they were ready to file and then asking for DIP financing. It is still borrowed money and comes with a lot less strings - so it is smart for them to have done it - but it still borrowed money.

 

[Mr Red]

Of course Doug Parker doesn't really want his plan to be subjected to a comparative scrutiny w/ AA's standalone plan and a bunch of other options. That's probably why he has said that there is a point in the AA BK process at which US doesn't want to be involved anymore - because once AA demonstrates that it can emerge on a standalone basis, the price of buying them out gets a whole lot larger.

let's also just say that AA borrowed the money for their BK before they filed rather than waiting until they were ready to file and then asking for DIP financing. It is still borrowed money and comes with a lot less strings - so it is smart for them to have done it - but it still borrowed money.

I guess B/K has been good to AA.started with 4 BILLION in UNRESTRICTED cash and short term investments,and now its 6 BILLION.Back in march all the experts were saying there would be a cash bleed
because of labor strife.Guess what didn't happen!Oh ,I almost forgot.the AA/US merger was WHORTONS idea all
along !

 

[Bob Owens]

Hmm, wasnt the USAIRWAYs mechanics and some of the other workers pensions dumped into the PBGC? Does anyone think that the USAIR plan would keep paying what was owed to ours while not paying theirs?

 

[Toothy Grin]

Mr. Red, I'm giving you a minus one.

This "merger" lol or grand opera we are in has so many different outcomes yet to come to fruition that the unrestricted cash seems to somehow play a smaller role especially when compared to "what do the creditors want?"

Also, we do not yet know wether or how labor strife will rear its head. What we do know is that 3 different contracts are out for vote, unless I'm mistaken. What happens if 2 or 3 of these gets voted down will determine alot. If all three are voted down, YES there will be that strife you think that hasn't appeared.

Horeton's idea to merge or futher consolidate the airlines is not that big of deal. Have you never sat around with some friends and seen a commercial and someone says "I thought of that idea!" There are a gazillion ideas floating around...it is the execution of said idea and the relevancy to the current market that wins the game...and he's having a bad time in both areas. Also, Parker has never ran around saying "I thought of it!" He took the idea and ran with it while Tom "stuck in his thumb and pulled out a plum..." <== not a good time to sit on ones hands, if you ask me.

I think most people know that the current model with the corrections he plans on making will not cut it in 2014-2020. From what I'm reading most on here seem to think everything will remain the same, just some market volitility, but not much else. The real #### has not hit the fan yet. The China bubble hasn't even burst...and then there are the problems with the banking sectors that are still coming down the pipeline. Merging with a larger carrier such as US would be the smartest move, personal opinions aside.

I think if he doesn't choose US, then there will be an eventual bidding war over US by the larger carriers...as things flatline 2014 -2022.

 

[Toothy Grin]

Of course Doug Parker doesn't really want his plan to be subjected to a comparative scrutiny w/ AA's standalone plan and a bunch of other options. That's probably why he has said that there is a point in the AA BK process at which US doesn't want to be involved anymore -

This is standard MO for Douggie to keep trying to marry a legacy, and AA is the last one.

You know, I love how you two just have it in for Parker as though he were the first slippery business man you ever heard about. You know WT you go on and on about the value of this and the meaning of that, but in the end I don't think you've ever had to cut a deal or known anyone or been in a family where they do run a large company and see what really happens to get something done. Theorhetical knowledge I say!

Pitbull, you're just as bad. You have this long standing grudge or who knows what tired vengance from days of yore, but it is so old and sloppy and irrelevant at this point. Just get over it already,OK?

Others: And to those of you who have your identities tied up as an AA'er or US'er you've got to get over this. I wrote several years ago on the other board about airline consolidation globally. The rug is being pulled out from under you no matter who you work for...and that's any company, not just airlines. This airline restructuring is a microcosm of what is happening in all areas globally. I shall remind everyone that you can expect the same process to happen to your religions as well.

 

[DNTULSA]

Perhaps merging with a couple of smaller creditiors would also be a good idea.

USAir has some severe problems (pilots) that must be resolved before a merger should take place.