Chap. 11 ?

ForkTime2002

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[P]
[BLOCKQUOTE][BR]----------------[BR]On 12/4/2002 4:58:51 PM wts54 wrote:
[P]Any ideas on what the hell is going[BR]to happen now?[/P]----------------[/BLOCKQUOTE]
[P][/P][STRONG][FONT face="Times New Roman" size=3]Sad to say it looks like you'll be joining us in 11 all too shortly.[BR]Good luck guys.[/FONT][/STRONG]
 
OP
F

ForkTime2002

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[P]
[BLOCKQUOTE][BR]----------------[BR]On 12/4/2002 4:58:51 PM wts54 wrote:
[P]Any ideas on what the hell is going[BR]to happen now?[/P]----------------[/BLOCKQUOTE]
[P][/P][STRONG][FONT face="Times New Roman" size=3]Sad to say it looks like you'll be joining us in 11 all too shortly.[BR]Good luck guys.[/FONT][/STRONG]
 

synchronicity

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Nov 27, 2002
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[blockquote]
----------------
On 12/4/2002 4:58:51 PM wts54 wrote:

Any ideas on what the hell is going
to happen now?Brace for impact.
----------------
[/blockquote]

United will file for Ch.11 bankruptcy protection within 48 hours, probably much sooner. I would not be surprised if they file tomorrow morning around 8 AM. The only delay now is if they have any details remaining to be worked out on the DIP financing.

Sorry to everyone. I was hoping the discussions regarding BK law would remain hypothetical.

-synchronicity
 

synchronicity

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Nov 27, 2002
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[blockquote]
----------------
On 12/4/2002 4:58:51 PM wts54 wrote:

Any ideas on what the hell is going
to happen now?Brace for impact.
----------------
[/blockquote]

United will file for Ch.11 bankruptcy protection within 48 hours, probably much sooner. I would not be surprised if they file tomorrow morning around 8 AM. The only delay now is if they have any details remaining to be worked out on the DIP financing.

Sorry to everyone. I was hoping the discussions regarding BK law would remain hypothetical.

-synchronicity
 

wts54

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Sep 16, 2002
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United turned down by feds

Request for loan guarantees rejected due to doubts about business plan; bankruptcy likely.
December 4, 2002: 6:57 PM EST



NEW YORK (CNN/Money) - United Airlines appeared to be flying towards certain bankruptcy Wednesday evening after a government panel voted two-to-one against an application for $1.8 billion in federal loan guarantees.

"The board believes that the business plan submitted by the company is not financially sound," said the Air Transportation Stabilization Board in a statement. "This plan does not support the conclusion that there is a reasonable assurance of repayment and would pose an unacceptably high risk to U.S. taxpayers."

The board added the plan was based on "unreasonably optimistic revenue projections.

"The board believes that with a more reasonable revenue forecast, United's revenues and costs still would not be aligned, even with the benefit of all proposed cost reduction initiatives," said the statement.

Shares of United parent UAL Corp. (UAL: Research, Estimates) had been little changed in trading Wednesday before the after-market announcement by the board. But shares plunged $1.92, or about 62 percent, to $1.20, after closing down 7 cents in regular-hour trading.

One of the three members of the panel weighing the application, Kirk Van Tine, the Transportation Department's general counsel, voted to delay a vote until Dec. 9. The other two, representatives from the Treasury Department and Federal Reserve, voted for the rejection.

ATSB Executive Director Dan Montgomery said the vote was not a final one, that United could revise its business plan and resubmit its application. But time is running out for United, which faces nearly $1 billion in loan payments next week. It had said it needed to win the loan guarantees in order to make those payments.

Spokesmen for United said they would have a comment on the vote shortly.

Employee concessions not enough
The decision comes on the eve of a scheduled vote by the airlines' mechanics on a 7 percent wage cut designed to save the airline $700 million over the next 5-1/2 years, part of a $5.2 billion labor cost reduction package put together by the carrier in an attempt to get the help. Scotty Ford, president of the unit of the International Association of Machinists, which represents the United mechanics, said he intends to go ahead with the vote, but it's possible it could still be cancelled. Mechanics had already rejected a nearly identical wage package last week, and the vote had been seen as a last chance to win the loan guarantee.

"It might be pointless (to hold the vote)," Ford said. "With this devastating news, I don't know what the tone of the membership will be."

The ATSB's Montgomery said that the panel considered the application as if the mechanics had approved the concessions package and that all the promised cost savings were in place.

Even if the airline is forced to file for bankruptcy protection, it may continue to operate. Many carriers, including US Airways Group, have continued to fly while operating under bankruptcy.

But the bankruptcy filing could wipe out the Employee Stock Ownership Plan that controls a majority of the shares of the company. Pilots at United have about a 25 percent stake in the airline, while members of the IAM have about a 20 percent stake. The employees could also lose their labor contracts' protections under bankruptcy court.

"These are hard decisions, and I certainly feel for the affected employees," said a statement from ATSB chairman Edward Gramlich. "At the same time, the loan board has a responsibility to taxpayers, and to fostering the long-term health of the airline industry. Given our conclusion that the business plan submitted by the company is financially unsound, I believe it best not to approve the United proposal."

Suppliers and creditors also stand to lose. The world's No. 2 airline had said the loan guarantees were necessary for it to make payments on $920 million in debt it missed on Monday.

Political leaders, including U.S. House Speaker Dennis Hastert, who like United is from Illinois, had lobbied on behalf of the loan guarantees.

Competing airlines, including No. 1 carrier American Airlines (AMR: Research, Estimates) and No. 5 Continental Airlines (CAL: Research, Estimates) had lobbied against the loan guarantees, saying that United's problems were due to its cost structure, not the Sept. 11 terrorist attack, and that it should solve its problems without federal assistance.

"The U.S. government did the right thing for the taxpayers and for competition by letting the marketplace determine winners and losers," said a statement from Continental Wednesday.

Montgomery denied that lobbying by politician and other carriers had an effect on the staff, saying they had looked only at only the fundamentals of United's business plan.
 

wts54

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Sep 16, 2002
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United turned down by feds

Request for loan guarantees rejected due to doubts about business plan; bankruptcy likely.
December 4, 2002: 6:57 PM EST



NEW YORK (CNN/Money) - United Airlines appeared to be flying towards certain bankruptcy Wednesday evening after a government panel voted two-to-one against an application for $1.8 billion in federal loan guarantees.

"The board believes that the business plan submitted by the company is not financially sound," said the Air Transportation Stabilization Board in a statement. "This plan does not support the conclusion that there is a reasonable assurance of repayment and would pose an unacceptably high risk to U.S. taxpayers."

The board added the plan was based on "unreasonably optimistic revenue projections.

"The board believes that with a more reasonable revenue forecast, United's revenues and costs still would not be aligned, even with the benefit of all proposed cost reduction initiatives," said the statement.

Shares of United parent UAL Corp. (UAL: Research, Estimates) had been little changed in trading Wednesday before the after-market announcement by the board. But shares plunged $1.92, or about 62 percent, to $1.20, after closing down 7 cents in regular-hour trading.

One of the three members of the panel weighing the application, Kirk Van Tine, the Transportation Department's general counsel, voted to delay a vote until Dec. 9. The other two, representatives from the Treasury Department and Federal Reserve, voted for the rejection.

ATSB Executive Director Dan Montgomery said the vote was not a final one, that United could revise its business plan and resubmit its application. But time is running out for United, which faces nearly $1 billion in loan payments next week. It had said it needed to win the loan guarantees in order to make those payments.

Spokesmen for United said they would have a comment on the vote shortly.

Employee concessions not enough
The decision comes on the eve of a scheduled vote by the airlines' mechanics on a 7 percent wage cut designed to save the airline $700 million over the next 5-1/2 years, part of a $5.2 billion labor cost reduction package put together by the carrier in an attempt to get the help. Scotty Ford, president of the unit of the International Association of Machinists, which represents the United mechanics, said he intends to go ahead with the vote, but it's possible it could still be cancelled. Mechanics had already rejected a nearly identical wage package last week, and the vote had been seen as a last chance to win the loan guarantee.

"It might be pointless (to hold the vote)," Ford said. "With this devastating news, I don't know what the tone of the membership will be."

The ATSB's Montgomery said that the panel considered the application as if the mechanics had approved the concessions package and that all the promised cost savings were in place.

Even if the airline is forced to file for bankruptcy protection, it may continue to operate. Many carriers, including US Airways Group, have continued to fly while operating under bankruptcy.

But the bankruptcy filing could wipe out the Employee Stock Ownership Plan that controls a majority of the shares of the company. Pilots at United have about a 25 percent stake in the airline, while members of the IAM have about a 20 percent stake. The employees could also lose their labor contracts' protections under bankruptcy court.

"These are hard decisions, and I certainly feel for the affected employees," said a statement from ATSB chairman Edward Gramlich. "At the same time, the loan board has a responsibility to taxpayers, and to fostering the long-term health of the airline industry. Given our conclusion that the business plan submitted by the company is financially unsound, I believe it best not to approve the United proposal."

Suppliers and creditors also stand to lose. The world's No. 2 airline had said the loan guarantees were necessary for it to make payments on $920 million in debt it missed on Monday.

Political leaders, including U.S. House Speaker Dennis Hastert, who like United is from Illinois, had lobbied on behalf of the loan guarantees.

Competing airlines, including No. 1 carrier American Airlines (AMR: Research, Estimates) and No. 5 Continental Airlines (CAL: Research, Estimates) had lobbied against the loan guarantees, saying that United's problems were due to its cost structure, not the Sept. 11 terrorist attack, and that it should solve its problems without federal assistance.

"The U.S. government did the right thing for the taxpayers and for competition by letting the marketplace determine winners and losers," said a statement from Continental Wednesday.

Montgomery denied that lobbying by politician and other carriers had an effect on the staff, saying they had looked only at only the fundamentals of United's business plan.
 

Boomer

Veteran
Aug 20, 2002
1,139
70
United Airlines makes plans for bankruptcy financing.
The carrier is reportedly holding negotiations with J.P. Morgan Chase, Citigroup and Bank One, as well as General Electric's financing unit GE Capital.

The negotiations with the companies are expected to result in the airline securing debtor-in-possession financing of about USD1.5bn.
_______________________________

United Airlines invokes grace periods
On the UP newswires for Dec 03, 2002--United Airlines was buying time Tuesday, invoking grace periods for its debt payments as it pushed for government loan guarantees to avert bankruptcy. With about $1 billion on hand, the nation's second-largest carrier faced $920 million in various debt obligations.
________________________________

UAL has been turned down for the ATSB loans, is in default for over 900 million in debt for which it cannot pay without stripping all of its' available cash. In addition, UAL has or is securing DIP financing for the bankruptcy that it knows is coming.

The thing is that both the technical loan default and the DIP financing were known before the ATSB made their decision. In addition, there were numerous industry analysts and observers that questioned the UAL plan submitted to the ATSB prior to it being made know the full extent of the technical default. The ATSB cited the planned spending reductions in their deliberations but concluded that it was the REVENUE PROJECTIONS THAT DID NOT FIT.

Bankruptcy was where UAL was headed and it is where they are going. Why would the Mechanics conceede anything now when that will be the subject of upcoming negotiations during Bankruptcy?
 

Boomer

Veteran
Aug 20, 2002
1,139
70
United Airlines makes plans for bankruptcy financing.
The carrier is reportedly holding negotiations with J.P. Morgan Chase, Citigroup and Bank One, as well as General Electric's financing unit GE Capital.

The negotiations with the companies are expected to result in the airline securing debtor-in-possession financing of about USD1.5bn.
_______________________________

United Airlines invokes grace periods
On the UP newswires for Dec 03, 2002--United Airlines was buying time Tuesday, invoking grace periods for its debt payments as it pushed for government loan guarantees to avert bankruptcy. With about $1 billion on hand, the nation's second-largest carrier faced $920 million in various debt obligations.
________________________________

UAL has been turned down for the ATSB loans, is in default for over 900 million in debt for which it cannot pay without stripping all of its' available cash. In addition, UAL has or is securing DIP financing for the bankruptcy that it knows is coming.

The thing is that both the technical loan default and the DIP financing were known before the ATSB made their decision. In addition, there were numerous industry analysts and observers that questioned the UAL plan submitted to the ATSB prior to it being made know the full extent of the technical default. The ATSB cited the planned spending reductions in their deliberations but concluded that it was the REVENUE PROJECTIONS THAT DID NOT FIT.

Bankruptcy was where UAL was headed and it is where they are going. Why would the Mechanics conceede anything now when that will be the subject of upcoming negotiations during Bankruptcy?