AMR Can Reject Some Engine, Jet Leases: Judge

[BoeingBoy]

Yes, the judge approved AA's motion to perform as required under the pre-petition derivative contracts and to enter into post-petition derivative contracts with two small changes sought by the creditor's committee for fuel hedging - the 60% of anticipated quarterly needs and 10 days to review new fuel hedge contracts before AA can commit to them. Doc 433 on the docket is the judge's order.

When you're searching for "The Whole Truth" the actual documents are a better source than misreading some reporter's version of "The Truth"...

Jim

 

[WorldTraveler]

As I noted, AMR's previous plans did not conform with what is acceptable in BK... AMR is NOT free to enter into derivative contracts as they once did and MS was not willing to enter into contracts w/o having "super priority" claim status. Whether it is AMR or any other company, you don't have the freedom to put the creditor's money at risk the way they did outside of BK. AMR did not have to get anyone to sign a permission slip before entering into contracts before.... which they now must do.
Doesn't mean AMR couldn't have amended their plans... but they did have to change.

 

[BoeingBoy]

As I noted, AMR's previous plans did not conform with what is acceptable in BK... AMR is NOT free to enter into derivative contracts as they once did and MS was not willing to enter into contracts w/o having "super priority" claim status. Whether it is AMR or any other company, you don't have the freedom to put the creditor's money at risk the way they did outside of BK. AMR did not have to get anyone to sign a permission slip before entering into contracts before.... which they now must do.
Doesn't mean AMR couldn't have amended their plans... but they did have to change.

The change was consensually worked out with the creditor's committee. FWIW, AMR still doesn't have to get "anyone to sign a permission slip" - they just agreed to give the creditor's committee time to review the fuel hedges only if they exceed 60% of anticipated need for the quarter being hedged or require approval of the BOD. Only if the committee objects does AMR need to either take it's chances with the judge or negotiate changes with the committee. As long as fuel hedge contracts don't exceed 60% of anticipated need AMR can proceed as always. I don't think that AMR has hedged over 60% of it's anticipated need in the past so this effectively has no impact at all.

Other derivative contracts have no restriction on them. And that's the "whole truth"...

Jim