TWU gets 4.8% equity
- Thread starter AAmechanic
- Start date
Debt won't be discharged (wiped out) until the Plan of Reorganization is confirmed and AA exits Ch 11. At that time, all unsecured debts (where the lender has no collateral) will be discharged and the creditors will likely receive stock in the new AMR. AMR didn't have a lot of unsecured debt, so that won't be more than a billion or two.
AA's secured debt (primarily airplane debt) will continue as debt but the principal of some of that debt will be reduced to the fair market value of the collateral (where the value of the airplanes has declined). The amount of the debt in excess of the collateral value will be unsecured (see above for treatment). A good example would be the debt on the Embraer RJs. AA owes a couple billion dollars on them and will likely get that reduced substantially as they're not worth very much as the market value for 50 seaters (and 37-44 seaters) has fallen off a cliff. There may be other secured debt where the collateral is older 763s and older 757s that will also get a principal reduction. AA has been negotiating those (plus lease reductions) since it filed.
Some other debt that may be discharged consists of the tax-free bonds that financed airport terminal improvements at JFK, LAX, DFW and others. AA has argued that it does not have to vacate the space to rid itself of the tax-free bond debt. Dunno how that's progressing.
I think that some AA unsecured debt is trading for north of 50 cents on the dollar as the buyers see it as a great way to acquire new AMR stock on the cheap. That's certainly a gamble, as AA's plan might only pay a small fraction of the unsecured debt (pennies on the dollar) and then pay it in new stock, not cash.
It's clear that AA didn't file its Ch 11 petition primarily to wipe out debt; the primary motivation appears to be to get off the stalemate with the labor negotiations. But if you're already in bankruptcy court, might as well wipe out all the debt you can while you're there.
High Speed Steel
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So with what you have said here and from the former post of 700UW of his AMFA experience there is no value to having observers or non-participants in the room during negotiations, which expunges the AMFA supporters argument that observers are neccessary to keep you fella's on the up and up because they too would be tossed out as critical confidential information was to be disclosed.
TWU informer
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High Speed Steel
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Ask that question in the proper forum and you will get your answer paper tiger....Grrrraaawwwweeerrrr B)
iluvaa
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- Mar 22, 2007
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Puss can't answer a question thanks for wasting my money clip board mechanic just so you know we can't stand your kind on the hangar floor
High Speed Steel
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I dont recall 700uw ever saying he had an "AMFA experience", I was under the impression he spent his career as a member of the IAM at US. But then again you do like to make up things so long it fits with the message you're trying to spin like saying that oldie said losing Article 42 would end his career and all the various things you've claimed I said over the years .
Critical information? Critical in what sense? That they don't want their employees to find out what they are up to or their competitors? I think it's stuff they don't want us to know that their competitors already know.
Observers? Well technically we already have them but we call them the Negotiating Team.
- Aug 20, 2002
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Oh but they have....Gee thanks odie. Hey, glad you recognize my efforts here have not gone to waste...
High Speed Steel
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Chuck Schalk
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A leader would never follow your advice.
High Speed Steel
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So your done? Leading takes courage...
Two things that you obviously know nothing about.
