calibrator
Veteran
- Joined
- Jan 30, 2004
- Messages
- 558
- Reaction score
- 0
Selling drugs makes more sense then.....cash flow my ICE....it's overua767fo said:
Wsj: Us/awa Seek Allies For Merger
- Thread starter EyeInTheSky
- Start date
USA320Pilot
Veteran
- Joined
- May 18, 2003
- Messages
- 8,175
- Reaction score
- 1,539
Funguy2:
Funguy2 asked: "Last week you posted that RSA would be prohibited from making such an investment due to the "prudent man" rule. Can they make the investment or not?"
USA320Pilot answers: Funguy 2, that's not what I said I believe you should read my comments more closely.
I said, "In regard to RSA, a key to understanding their reluctance up to this point to provide any public assurance of financing for US Airways’ exit from bankruptcy is that RSA was legally prohibited from further investment in US Airways, but that now seems to have changed. The "prudent man" rules governing their administration of the RSA pension fund would not allow this on penalty of a surcharge."
"Meanwhile, people with knowledge of the situation indicated that RSA has shopped a number of prestigious law firms in recent days for a written opinion that such additional investment would not contravene these fiduciary restrictions provided that US Airways’ situation is materially different, another words, that their risk profile of the investment is reduced. There have been indications that RSA has such an opinion in hand, contingent on the America West deal being successfully negotiated," he noted.
Funguy2, the company has inidcated that it is involved in equity discussions with a number of interested parties and today Susan Carey reported that "US Airways Group Inc. and America West Holdings Corp., which remain in serious merger talks, are searching among other airlines and investment firms for the money needed to cinch the deal."
Moreover, Rick Schifter, managing partner of TPG, told the Arizona Republic last week "(TPG), a legendary bargain hunter, doesn't see a lot of steals out there because there is so much capital chasing few deals (in the airline industry). That drives prices up."
Funguy2, because there are a number of parties involved in the discussions it reamins unclear to US Airways how this will end up and who will be the final equity investor(s). In regard to RSA, people with knowledge of the discussions told me RSA "has shopped a number of prestigious law firms in recent days for a written opinion on whether or not an investment into US Airways/America West passes the "prudent man" test and that there are indications RSA has such opinion in hand.
In regard to Lufthansa and their North American alliance options, there is serious concerns on Wall Street that United can survive. With the pension issue, ALPA objecting to the PBGC-United agreement, the S.1113(e) filing against the AFA, the S.1113© filing against the AFA, AFA, & IAM, and today's news that AMFA has joined the AFA with strike threats, the the Chicago-based carrier will not survive. Even if United is successful with the S.1113 process, which could easily happen, what if there is a job action or "operational meltdown" like US Airways experienced in PHL over the holidays?
Meanwhile, Lufthansa and other Star Alliance members are reportedly concerned about their North American exposure if United fails, which could create interest in some form of a strategic transaction between Air Canada and the combined US Airways-America West.
Time will tell how this unfolds with so many parties involved.
Regards,
USA320Pilot
Funguy2 asked: "Last week you posted that RSA would be prohibited from making such an investment due to the "prudent man" rule. Can they make the investment or not?"
USA320Pilot answers: Funguy 2, that's not what I said I believe you should read my comments more closely.
I said, "In regard to RSA, a key to understanding their reluctance up to this point to provide any public assurance of financing for US Airways’ exit from bankruptcy is that RSA was legally prohibited from further investment in US Airways, but that now seems to have changed. The "prudent man" rules governing their administration of the RSA pension fund would not allow this on penalty of a surcharge."
"Meanwhile, people with knowledge of the situation indicated that RSA has shopped a number of prestigious law firms in recent days for a written opinion that such additional investment would not contravene these fiduciary restrictions provided that US Airways’ situation is materially different, another words, that their risk profile of the investment is reduced. There have been indications that RSA has such an opinion in hand, contingent on the America West deal being successfully negotiated," he noted.
Funguy2, the company has inidcated that it is involved in equity discussions with a number of interested parties and today Susan Carey reported that "US Airways Group Inc. and America West Holdings Corp., which remain in serious merger talks, are searching among other airlines and investment firms for the money needed to cinch the deal."
Moreover, Rick Schifter, managing partner of TPG, told the Arizona Republic last week "(TPG), a legendary bargain hunter, doesn't see a lot of steals out there because there is so much capital chasing few deals (in the airline industry). That drives prices up."
Funguy2, because there are a number of parties involved in the discussions it reamins unclear to US Airways how this will end up and who will be the final equity investor(s). In regard to RSA, people with knowledge of the discussions told me RSA "has shopped a number of prestigious law firms in recent days for a written opinion on whether or not an investment into US Airways/America West passes the "prudent man" test and that there are indications RSA has such opinion in hand.
In regard to Lufthansa and their North American alliance options, there is serious concerns on Wall Street that United can survive. With the pension issue, ALPA objecting to the PBGC-United agreement, the S.1113(e) filing against the AFA, the S.1113© filing against the AFA, AFA, & IAM, and today's news that AMFA has joined the AFA with strike threats, the the Chicago-based carrier will not survive. Even if United is successful with the S.1113 process, which could easily happen, what if there is a job action or "operational meltdown" like US Airways experienced in PHL over the holidays?
Meanwhile, Lufthansa and other Star Alliance members are reportedly concerned about their North American exposure if United fails, which could create interest in some form of a strategic transaction between Air Canada and the combined US Airways-America West.
Time will tell how this unfolds with so many parties involved.
Regards,
USA320Pilot
EyeInTheSky
Veteran
USA320Pilot, you could have just answered funguy's questions without the United factor. Now you're just going to piss the UAL employees off. ..again. We're you this annoying as a child? Wait....don't answer that.
Yes... I've now seen that you have re-quoted the original post. Fortuneately for me, I read your posts the first time...
If I read your response correctly, your response is essentially that RSA is shopping around for a law firm that will provide a statement that RSA is acting as a "prudent man," even though the very fact that they feel the need for legal advise on the matter probably indicates that such an investment would not be "prudent". Interesting web of half-truths and legaleze as a way to get around the issue.
As it stands today, RSA, TPG, or any other investor/group not dependent on US Airways for future revenue have come forward with any cash for the deal... In my mind, that says something.
My understanding is that GE has given US more time for a POR, must be an indication that they feel someone will invest in this merger.
Interestingly, TPG announced today a deal with another investment firm to acquire retailer Neiman Marcus. Perhaps TPG's focus for the moment is elsewhere? Perhaps when TPG reviews the deal, they will be more inclined to participate? Perhaps TPG, a group who is notoriously shy of the press, made a statement to the press to push a particular outcome, as CluebyFour suggested? Who knows.
If I read your response correctly, your response is essentially that RSA is shopping around for a law firm that will provide a statement that RSA is acting as a "prudent man," even though the very fact that they feel the need for legal advise on the matter probably indicates that such an investment would not be "prudent". Interesting web of half-truths and legaleze as a way to get around the issue.
As it stands today, RSA, TPG, or any other investor/group not dependent on US Airways for future revenue have come forward with any cash for the deal... In my mind, that says something.
My understanding is that GE has given US more time for a POR, must be an indication that they feel someone will invest in this merger.
Interestingly, TPG announced today a deal with another investment firm to acquire retailer Neiman Marcus. Perhaps TPG's focus for the moment is elsewhere? Perhaps when TPG reviews the deal, they will be more inclined to participate? Perhaps TPG, a group who is notoriously shy of the press, made a statement to the press to push a particular outcome, as CluebyFour suggested? Who knows.
BoeingBoy
Veteran
- Joined
- Nov 9, 2003
- Messages
- 16,512
- Reaction score
- 5,865
As odd as it may seem (don't get light-headed now), I agree that funguy misinterpreted your remarks about RSA and the "prudent man rule". While your comments regarding that are intriguing in themselves (more later), you did say that RSA previously believed that further investment in US was imprudent but that that might have changed.
Now, before everyone faints at our agreement, I find the other comments interesting and somewhat at odds with each other.
From Rick Schifter at TPG "doesn't see a lot of steals out there because there is so much capital chasing few deals (in the airline industry)." This implies that there are investors lined up with checkbooks open just panting to hand over their money, which would imply that getting the necessary investment requires nothing more than choosing whose money to accept.
However, Susan Carey reported that "US Airways Group Inc. and America West Holdings Corp., which remain in serious merger talks, are searching among other airlines and investment firms for the money needed to cinch the deal." This implies that there is a search for investors going on, which implies that investors aren't lined up begging to invest.
It's the old "bird in the hand vs bird in the bush" thing - if "birds" are just waiting to jump into our hand why all the "beating the bushes" trying to find a "bird"?
Now for the RSA situation and why it's interesting....
Supposedly, they previously thought that further investment in US was imprudent given the "prudent man rule". Given the rather lax criteria used in Alabama to evaluate whether the "pmr" is being followed, one would think that any "prestigious law firm" worth it's salt would be able to come up with an opinion justifying further investment considering the changes that have taken place over the last months and those contemplated in the future. That RSA had to "shop a number of prestigious law firms" to get such an opinion speaks volumes.
Finally, since you added to your post since I started typing this....
Interesting that you'd say "Even if United is successful with the S.1113 process, which could easily happen, what if there is a job action or "operational meltdown" like US Airways experienced in PHL over the holidays?" Wasn't it you who said that a job action was illegal following an 1113 contract abrogation, and even if it wasn't that the judge would prohibit such a job action? Why the change of heart when it comes to UA?
Respectfully,
Jim
Now, before everyone faints at our agreement, I find the other comments interesting and somewhat at odds with each other.
From Rick Schifter at TPG "doesn't see a lot of steals out there because there is so much capital chasing few deals (in the airline industry)." This implies that there are investors lined up with checkbooks open just panting to hand over their money, which would imply that getting the necessary investment requires nothing more than choosing whose money to accept.
However, Susan Carey reported that "US Airways Group Inc. and America West Holdings Corp., which remain in serious merger talks, are searching among other airlines and investment firms for the money needed to cinch the deal." This implies that there is a search for investors going on, which implies that investors aren't lined up begging to invest.
It's the old "bird in the hand vs bird in the bush" thing - if "birds" are just waiting to jump into our hand why all the "beating the bushes" trying to find a "bird"?
Now for the RSA situation and why it's interesting....
Supposedly, they previously thought that further investment in US was imprudent given the "prudent man rule". Given the rather lax criteria used in Alabama to evaluate whether the "pmr" is being followed, one would think that any "prestigious law firm" worth it's salt would be able to come up with an opinion justifying further investment considering the changes that have taken place over the last months and those contemplated in the future. That RSA had to "shop a number of prestigious law firms" to get such an opinion speaks volumes.
Finally, since you added to your post since I started typing this....
Interesting that you'd say "Even if United is successful with the S.1113 process, which could easily happen, what if there is a job action or "operational meltdown" like US Airways experienced in PHL over the holidays?" Wasn't it you who said that a job action was illegal following an 1113 contract abrogation, and even if it wasn't that the judge would prohibit such a job action? Why the change of heart when it comes to UA?
Respectfully,
Jim
What if US suffers another operational meltdown? What if HP suffers job action when US employees demand date of hire? What if US runs out of cash? You can what-if almost any scenario you want, but we all know how you spin your biases.USA320Pilot said:
Did you come up with that all by yourself, or did you need to pretend to hear it from a boardroom? The Star Alliance is concerned about their North American exposure if United fails. Well Hot Damn! Gee, maybe because UA carries such a high % of North American interline Star traffic. Maybe because the only *A airlines that fly to US/HP hubs are UA, LH and AC. Star would be stupid to NOT consider the possibilities of a UA failure, but don't think for a second that in the unlikely event of a UA liquidation that US and HP would be their new primary North American carrier. US/HP do not have the operational scope to handle the massive feed that Star needs from the U.S. market. I would expect someone from the DL/CO/NW alliance to bolt for greener pastures in Star if UA liquidated. US/HP would still be a part of it and a temporary fix, but alone US/HP cannot provide the feed that Star needs.
Boeing Boy - excellent comments.
As far as my "misinterpretation"... I will freely admit that I have difficulty figuring out which side of the fence that USA320Pilot is on. He often contradicts himself, and well, its tough to keep up. For example, in the thread "PMR" thread, he said in one post that RSA was not permitted to invest further, then followed up with the "shopping around" bit... So I am guess the presumption now that RSA is no longer "shopping", but has indeed has "purchased"?
BTW, I would think RSA would be a regular customer of one or more law firms, or have sufficient internal legal expertize. As such, I am suspiscious of USA320Pilot's rather unsubstantiated claims that RSA is "shopping" for a law firm to declare them free of the "PMR". Rather, if anything, they are probably investigating the potential transaction to see if its prudent for another investment.
As I said before, I am following the money. So far, I don't see any from RSA. At this point, I would think that any further investment by RSA would depend on what assets/leases they are trying to protect. If memory serves me correctly, RSA got involved in the first place because they had made certain leases to US Airways. I am curious as to the current status of those leases...
As far as my "misinterpretation"... I will freely admit that I have difficulty figuring out which side of the fence that USA320Pilot is on. He often contradicts himself, and well, its tough to keep up. For example, in the thread "PMR" thread, he said in one post that RSA was not permitted to invest further, then followed up with the "shopping around" bit... So I am guess the presumption now that RSA is no longer "shopping", but has indeed has "purchased"?
BTW, I would think RSA would be a regular customer of one or more law firms, or have sufficient internal legal expertize. As such, I am suspiscious of USA320Pilot's rather unsubstantiated claims that RSA is "shopping" for a law firm to declare them free of the "PMR". Rather, if anything, they are probably investigating the potential transaction to see if its prudent for another investment.
As I said before, I am following the money. So far, I don't see any from RSA. At this point, I would think that any further investment by RSA would depend on what assets/leases they are trying to protect. If memory serves me correctly, RSA got involved in the first place because they had made certain leases to US Airways. I am curious as to the current status of those leases...
BoeingBoy
Veteran
- Joined
- Nov 9, 2003
- Messages
- 16,512
- Reaction score
- 5,865
funguy2 said:
Good question. Looking up the repayment schedule for the ATSB loan the other day, I happened across a list of the planes and leasors/mortgage holders for each from BK1. It appears RSA holds several of the leases/mortgages - I didn't bother going thru the whole list - with some other institution listed as trustee (thus RSA wouldn't show up on a search of the FAA database).
Maybe I'll go thru the list sometime....
Jim
usair_begins_with_u
Veteran
- Joined
- May 9, 2004
- Messages
- 623
- Reaction score
- 0
One thing you have to admit.. who ever forks up cash for Uair right now is going to get quite a bargan... no better time to get in than at the bottom.
USA320Pilot
Veteran
- Joined
- May 18, 2003
- Messages
- 8,175
- Reaction score
- 1,539
BoeingBoy:
My new comments about United were made due to some information I just heard from a source with knowledge of ALPA E&FA. United can get through its upcoming hurdles in May just like US Airways did last January. Many people predicted US Airways would be dead and the doors shut by mid-January and the company is still flying.
Let’s face it -- United's hurdles are deeper than US Airways were and thus the market skepticism about the Chicago-based carrier’s ability to emerge from bankruptcy. May could be a defining month for the airline industry with a resolution to both US Airways’ and United’s formal reorganizations.
Just like US Airways’ situation, United’s situation is fluid too. With so many parties involved it’s difficult for management never mind people outside the “executive suite†to predict what will happen.
The main reason US Airways is operating today is that the ATSB, GE, and other financial partners have given the company support. It remains to be seen if that happens to US Airways’ domestic alliance partner. Moreover, I now have reason to believe United's deteriorating situation is effecting outside sentiment to support US Airways' restructuring.
I believe United's situation is similar to US Airways in regard to the S.1113 process. The judge will likely rule in favor of the company and most of the unions will not strike. However, I believe United employees are more militant than US Airways employees and that's the difference. The greatest possible risk is a slowdown or PHL type of "operational meltdown." Will it occur? I do not know, but the US Airways PHL situation is probably hurting United in the eyes of investors or potential partners who could pick the US Airways-America West (and possibly Air Canada) partnership to invest instead of United.
Finally, the "prudent man" rule posting is information I obtained from a law firm contact who has knowledge of US Airways' situation. The issue is that RSA is operating per the law and retirement fund requirements deciding whether or not they will further invest in US Airways. Will RSA invest more? I do not know. Are they evaluating it? Absolutely.
Regards,
USA320Pilot
My new comments about United were made due to some information I just heard from a source with knowledge of ALPA E&FA. United can get through its upcoming hurdles in May just like US Airways did last January. Many people predicted US Airways would be dead and the doors shut by mid-January and the company is still flying.
Let’s face it -- United's hurdles are deeper than US Airways were and thus the market skepticism about the Chicago-based carrier’s ability to emerge from bankruptcy. May could be a defining month for the airline industry with a resolution to both US Airways’ and United’s formal reorganizations.
Just like US Airways’ situation, United’s situation is fluid too. With so many parties involved it’s difficult for management never mind people outside the “executive suite†to predict what will happen.
The main reason US Airways is operating today is that the ATSB, GE, and other financial partners have given the company support. It remains to be seen if that happens to US Airways’ domestic alliance partner. Moreover, I now have reason to believe United's deteriorating situation is effecting outside sentiment to support US Airways' restructuring.
I believe United's situation is similar to US Airways in regard to the S.1113 process. The judge will likely rule in favor of the company and most of the unions will not strike. However, I believe United employees are more militant than US Airways employees and that's the difference. The greatest possible risk is a slowdown or PHL type of "operational meltdown." Will it occur? I do not know, but the US Airways PHL situation is probably hurting United in the eyes of investors or potential partners who could pick the US Airways-America West (and possibly Air Canada) partnership to invest instead of United.
Finally, the "prudent man" rule posting is information I obtained from a law firm contact who has knowledge of US Airways' situation. The issue is that RSA is operating per the law and retirement fund requirements deciding whether or not they will further invest in US Airways. Will RSA invest more? I do not know. Are they evaluating it? Absolutely.
Regards,
USA320Pilot
BoeingBoy
Veteran
- Joined
- Nov 9, 2003
- Messages
- 16,512
- Reaction score
- 5,865
USA320Pilot said:
I have no doubt that Bronner/RSA is evaluating the possibilities. What's that old saying - "What a tangled web we weave" or something like that.
As things stand right now - from public information - RSA stands to become a minor stakeholder with only a small portion of whatever new stock might go to unsecured creditors (that Tranche B loan) if US emerges from BK.
AirWis and Republic stand to own between almost 40% to just over 50% of the new stock if US emerges from BK prior to any transaction with AWA. Who knows what'll happen to their agreements is a transaction transpires prior to exiting BK.
TPG, if something transpires with AWA, will probably want a significant share of the new company or a nice tidy sum to go away.
Which leaves RSA where? Put no money in and be a bit player at best? Put in more and be a significant player, though possibly not in control? Put in even more and possibly be in control?
Questions with no answers.....
Jim
USA320Pilot
Veteran
- Joined
- May 18, 2003
- Messages
- 8,175
- Reaction score
- 1,539
BoeingBoy:
Your last post was well written and expresses my point. There are a number of parties involved in the discussions and its unclear to even the "executive suite" how this will unfold.
The good news is that there are multiple parties involved, which increases the odds US Airways will survive, but it's a complex and time consuming process. You're right there are "questions and no answers"...yet.
Regards,
USA320Pilot
Your last post was well written and expresses my point. There are a number of parties involved in the discussions and its unclear to even the "executive suite" how this will unfold.
The good news is that there are multiple parties involved, which increases the odds US Airways will survive, but it's a complex and time consuming process. You're right there are "questions and no answers"...yet.
Regards,
USA320Pilot
robbedagain
Veteran
- Joined
- Oct 13, 2003
- Messages
- 11,125
- Reaction score
- 2,676
USA320: IF UAL goes out of Business say by early to late fall, how will it affect USAIR and all of the parties involved? Also is it possible the bush admin will fix the 1938 law to allow air canada and lufthansa to help get the merger and the thing like that? especially since ual is a major star alliance? also will amw become a star partner to get the merger easier
