US Airways – Delta Merger Update

[brokenwrench]

Piney...everything you said above is exactly right on the Money. This is exactly how it stands.

Then why does it seem most of the US folks on this board are for the DL merger?

 

[ClueByFour]

USA320Pilot: Clue, with all due respect, it is my understanding that your comments above are not even close to being accurate.

With all due respect, your understanding is wrong. I suggest you read 11 U.S.C. § 1121. Absent relief from the judge on the exclusivity period, Doug has no leverage. Zero. I guess he could represent US as a "party of interest" in which case he'd have to convince a judge who (as you love to say) has sided with the company (DL) every time. The only way he gets anywhere is if the creditors bounce the POR.

So, I ask you a direct question: what part of the aforementioned chunk of the US Code is not applicable here?

Your silence on this matter will inevitably demonstrate that your understanding is "not even close to being accurate."

that whole paragraph is contradictory. The Delta pilots contract requires the seniority lists to be merged if they are acquired. You cannot honor their contract and not merge the companies.

Are you saying that the great 320pilot missed one? Mulligan at 11.

 

[BoeingBoy]

The only way he gets anywhere is if the creditors bounce the POR.

Correct me if I'm wrong, Clue, but it's my understanding that if DL presents a POR they then have 180 days to solicite support. That could take us (and US) through mid-August.

Jim

 

[BoeingBoy]

Well, I was thinking that as long as DL files a POR before the exclusivity period ends, US can't do anything in the court till at least mid-August. US can attempt to persuade the creditors to reject DL's plan, but that's all. In effect, DL management will be in the center ring and all US can do is shout "Don't look!"

Jim

 

[ClueByFour]

Correct me if I'm wrong, Clue, but it's my understanding that if DL presents a POR they then have 180 days to solicite support. That could take us (and US) through mid-August.

Jim

Jim,

My understanding is if the exclusivity period is extended by the judge that this does not necessarily need to be a full 180 days. In practice, the debtor will typically file to extend both the deadline to file a plan and solicit acceptance. I believe the 180 day period only applies if the debtor sticks to the initial exclusivity period outlined in the statute and does not seek an extension.

In DL's case, the current period (as motioned and ordered by the judge) for filing the plan runs until 2/15/07 and the deadline for solicitation is 4/16/2007. Not August, but not tomorrow. It's also likely that if DL files for another extension, they'll probably get it.

 

[BoeingBoy]

Thanks for the clarification, Clue.

Jim

 

[Gilding the Lily]

Jim,

My understanding is if the exclusivity period is extended by the judge that this does not necessarily need to be a full 180 days. In practice, the debtor will typically file to extend both the deadline to file a plan and solicit acceptance. I believe the 180 day period only applies if the debtor sticks to the initial exclusivity period outlined in the statute and does not seek an extension.

In DL's case, the current period (as motioned and ordered by the judge) for filing the plan runs until 2/15/07 and the deadline for solicitation is 4/16/2007. Not August, but not tomorrow. It's also likely that if DL files for another extension, they'll probably get it.

Yes, you are correct. The reason why the deadline for acceptance of the plan is in April and not August is because the 180-day period tolls from the day the relief under Chapter 11 was ordered... not from the day the plan is filed. So, if the plan is filed on the last day of the exclusive plan period, then the exclusive acceptance period ends 60 days later.

If a debtor requests the judge to extend the 120 day exclusivity period, without requesting an extension of the 180 day period, exclusivity will remain in place until the debtor files a plan, but there will be no exclusivity during the process of acceptance of the plan if the initial 180 day period has expired.

I am not sure that DL may receive another extension. Most large debtors receive at least 2 extensions... but when there is another "party-in-interest" (US), the competitor often may file a motion for cause to reduce the period or a motion for cause to deny the debtor's motion for extension. The "new" bankruptcy code is favorable to the competing plan in this scenario; it created limits to extended exclusivity periods. However, DL filed bankruptcy before the new code was in place and, thus, it does not effect this bankruptcy. But with that said, the judge may be more inclined to reject DL's motion because it would be more in line with what Congress envisioned the code to be.

 

[ClueByFour]

I am not sure that DL may receive another extension. Most large debtors receive at least 2 extensions... but when there is another "party-in-interest" (US), the competitor often may file a motion for cause to reduce the period or a motion for cause to deny the debtor's motion for extension. The "new" bankruptcy code is favorable to the competing plan in this scenario; it created limits to extended exclusivity periods. However, DL filed bankruptcy before the new code was in place and, thus, it does not effect this bankruptcy. But with that said, the judge may be more inclined to reject DL's motion because it would be more in line with what Congress envisioned the code to be.

I'd imagine that the extension rides on the official creditors committee. If you believe the previous filings, DL has worked with them before filing for the extension, and I'd imagine the judge giving them more credence that US as a "party of interest" because you can only really accept that US is a "party of interest" if the creditors are listening in large enough numbers.

That said, I'd expect the judge to go by the code as it was when DL actually filed. No point in opening a "hey--that's ex post facto" pissing contest.

 

[hp_fa]

You know, I just had a very nasty thought. What would happen if LCC bought up a lot of the outstanding unsecured debt from the unsecured creditors, including their voting rights? As I sit here now I am not instantly aware of anything precluding it.

 

[BoeingBoy]

Actually, there are people that do that. It happened in both US bankruptcies and is happening in DL's case. Of course, to buy up enough to insure that DL's POR (assuming they present one) doesn't pass could require a lot more than US is offering.

Jim

 

[Gilding the Lily]

because you can only really accept that US is a "party of interest" if the creditors are listening in large enough numbers.

It only takes 1 creditor "in your pocket" to be a "party in interest". Several Delta creditors have come out and formed groups in support of the US plan. Undoubtedly, these creditors will file the motions for cause on behalf of US when the February 15th deadline draws near.

If DL requests another extension it would be its fourth such request. The claims were filed before August 21, 2006, so by the time the next deadline comes around, DL would have had 6 months to evaluate the claims.

And DL and the PBGC has reached an agreement regarding the pension plans... that was one reason why DL asked for the extension last time. So, now that they will not have overwhelming support from the unsecured creditors, the Judge may be more willing to deny DL's motion or only allow a 60-day extension.

 

[ClueByFour]

Clue:

ClueByFour said: “Finally dawned on Doogie that absent the judge ending the exclusivity period and/or the creditors rejecting the POR that DL management puts forth that none of this is going to happen.â€￾

USA320Pilot: Clue, with all due respect, it is my understanding that your comments above are not even close to being accurate.

Regards,

USA320Pilot

P.S. With all due respect, I believe it is disrespectful to purposely mispronounce a persons name and it makes you look poor when you repeatedly do so.

After this, I subsequently wrote:

With all due respect, your understanding is wrong. I suggest you read 11 U.S.C. § 1121. Absent relief from the judge on the exclusivity period, Doug has no leverage. Zero.

Today, from http://biz.yahoo.com/ap/070123/delta_us_airways.html?.v=4

In fact, Parker said he is in the dark about what the creditors committee is thinking.

Parker said Delta's official committee of unsecured creditors, which will play a key role in deciding whether any merger agreement would move forward, has not indicated that it wants US Airways to offer more money.

Wow. Sounds like a guy with tons of leverage. "Parker said he is in the dark.

Citing unnamed sources, The Wall Street Journal reported Tuesday that US Airways' bid is losing traction among Delta's creditors, and that the creditors committee has grown skeptical of the proposed merger.

 

[Tim Nelson]

Perhaps but at least he can get through a post without insulting someone or name calling.

Also what exactly does your comment have to do with the topic at hand?

I've no earthly idea how this plays out. I'm thinking it's as dead as the Liberal Philosophy or perhaps as empty headed as Paris Hilton's brain.

I like that "...as empty as Paris Hilton's brain..."
It does appear that this thing is falling apart, the creditor's committee doesn't seem the least bit interested as regulatory matters could prove too big a hill.

regards,

 

[usair_begins_with_u]

Things more relevent than Dooogies bid for DL...