Chapter 7

CSSUP

Member
Aug 20, 2002
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Would one of you financial posters explain what would trigger US to file Chapter 7?
I thought we had enough cash on hand to last the quarter. We seem to have a bankruptcy Judge who is working with Management.
Though I feel further cuts will come to all departments. I just do not understand the Chapter 7 talk.
 
Either do we.

Rumors, especially nasty ones, have a way of taking on a life of their own.

Odds are that after the Board of Directors meeting today that the company will give our "Company Retirement" to the government. To everyone but the pilots, no big deal. That will shed enough off our debt that we will easily re-qualify for our bail-out, even if we go to war.

But for the Pilots it will mean a one hundred grand a year reduction in retirement benefits. Ouch!!! That's gotta hurt.
 

cavalier

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Aug 28, 2002
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Though I feel further cuts will come to all departments. I just do not understand the Chapter 7 talk.
-------------------------------------------------------------------------

Well then, lets us reason together.....

Employees at U are wondering if they have any kind of future.

Employees that are still here, come to work and try to accomplish their tasks at hand without the back ground influence of the grim reaper’s spirit descending over the entire company.

Employees wish it would end completely, right now, or the long dark tunnel will produce the day of light again, right now.

Employees are human and human beings who are lost in a dark forest find it a very uncomfortable feeling, wanting it to end, right now.

Employees who have a big part of their working life tied up in U or employees who are just scared can’t seem to say, I am moving on. These people would feel better if chapter 7 occurs giving them no other choice.

Then, there is always the possibility that U is indeed heading for chapter 7 which wouldn’t surprise any employee, and would actually be a relief to some employees. Rumors are part of this sort of thing whether true or false, it’s human nature


Don’t Worry, Be Happy

Happy Holidays………………..Cavalier
 

gilbertguy

Senior
Aug 29, 2002
368
0
[blockquote]
----------------
On 12/3/2002 10:07:56 AM DELLDUDE wrote:



[BLOCKQUOTE]i find it hard to fathom if we were destined for chapter 7 they wouldn't be spending excess monies moving hvy checks and relocating engine maintenence.even if we were headed to that option,i think dave would lay it on the table when hes due in court next week,not now.i'm cautiously optimistic.funny use of words...i think i've been that for 16 years now.----------------
On 12/3/2002 9:56:46 AM cavalier wrote:


Though I feel further cuts will come to all departments. I just do not understand the Chapter 7 talk.
-------------------------------------------------------------------------

Maybe they are just consolidating everything for their yardsale....also they are sitting on lots of monies $1.3 bil....can't be a charity case if you still have money in the bank....so spend it and then hold out the tincup.....
 

ChairPrefRes

Member
Aug 19, 2002
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If times were good a piecemeal sale of U's parts might fetch enough to satisfy a few creditors...But these are the absolute worst of times and all airlines are trying to keep enough cash to just keep operations going...CAL the low cost model of the majors is bleeding profusely and this is a bad sign for the whole industry...If war starts all the rest of the majors will be at the judge by Feb-Mar...This could put this industry in an absolute turmoil and only god might know how it will look in 12 months...Everybody at U... (should they keep it going) is just going to have to suck it up for a while and hope we're still standing next year...Then I think the ball is in our hands to run with onward and upward...
 
It might not be the Company choosing to file Ch.7 -- it could be creditors petitioning the Court to change the status.

If there isn't a viable reorganization plan filed within whatever timeframe the judge decides is reasonable, the Court can also initiate converting the Ch.11 filing into a Ch.7, which is what the Midway trustee did a few months back.
 

oldiebutgoody

Veteran
Aug 23, 2002
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I certainly agree with all the above. An airline (or ANY transportation system for that matter) is only as strong as it's network. It doesn't matter what else you have, if the network is bad (and I believe it is) than nothing else will work. Also, the closer you are to the brink (the media tells folks everyday about some of the underhanded things U management is allowing to happen around here, like closing hangars in the middle of the night 2 days before Thanksgiving), the fewer people will buy your tickets. Given a choice, I wouldn't buy tickets on U either. Especially for an event which I really wanted to attend, like holidays. All the bad press has got to be affecting our business; no two ways about it. Management, if they really want to run an airline (something I have serious doubts about) need to forget the cost situation and get revenue going again, looking into rebuilding the network. They are sadly mistaken if they think that RJs or code sharing will save this airline from oblivion (especially if you code share partner gets liquidated as well). They will help, no doubt about it, but they won't save it.
 

delldude

Veteran
Oct 29, 2002
28,211
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Downrange
www.youtube.com
[P]
[BLOCKQUOTE]i find it hard to fathom if we were destined for chapter 7 they wouldn't be spending excess monies moving hvy checks and relocating engine maintenence.even if we were headed to that option,i think dave would lay it on the table when hes due in court next week,not now.i'm cautiously optimistic.funny use of words...i think i've been that for 16 years now.----------------[BR]On 12/3/2002 9:56:46 AM cavalier wrote:
[P]Though I feel further cuts will come to all departments. I just do not understand the Chapter 7 talk.[BR]-------------------------------------------------------------------------[BR][BR]Well then, lets us reason together.....[BR][BR]Employees at U are wondering if they have any kind of future.[BR][BR]Employees that are still here, come to work and try to accomplish their tasks at hand without the back ground influence of the grim reaper’s spirit descending over the entire company.[BR][BR]Employees wish it would end completely, right now, or the long dark tunnel will produce the day of light again, right now.[BR][BR]Employees are human and human beings who are lost in a dark forest find it a very uncomfortable feeling, wanting it to end, right now. [BR][BR]Employees who have a big part of their working life tied up in U or employees who are just scared can’t seem to say, I am moving on. These people would feel better if chapter 7 occurs giving them no other choice.[BR][BR]Then, there is always the possibility that U is indeed heading for chapter 7 which wouldn’t surprise any employee, and would actually be a relief to some employees. Rumors are part of this sort of thing whether true or false, it’s human nature[BR][BR][BR]Don’t Worry, Be Happy[BR][BR]Happy Holidays………………..Cavalier[BR][BR][BR][BR][BR][/P]----------------[/BLOCKQUOTE]
[P][/P]
 

deelmakur

Advanced
Aug 26, 2002
203
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I'm certainly not a bankruptcy expert, but the company is currently in the throes of Chapter 11, which is largely a protective mechanism to preserve assets. Chapter 7 is the whole ballgame, and my guess is such an event would either be concurrent with, or right after a total shutdown, so it really isn't part of an orderly chain of events if things are stabilizing. If the company cannot find equilibrium by balancing cash burn with cash in the door, there isn't much future. That's what is disturbing about the speed with which they keep coming back for more, after just extracting significant concessions from various groups (employees, lessors, vendors, etc.). Often, in these circumstances, there are private negotiations, being conducted out of view, relative to a sale, merger, or some other kind of relief. That usually comes out later, in the aftermath of some big event. I personally look for anecdotal evidence. Things like the need to reset the cutbacks all the time, which suggests they can't keep up with the deterioration of the core business. Then you see an experienced smart guy like Bonderman, who could have easily outbid the Alabama guys, walk away from a chance to effectively take over the company for less than the cost of a couple of widebodies. That suggests he saw business problems that were bigger than had been presented, or he lost confidence in the management group (or both). Lastly, it's very quiet. Not much happening beyond asking for givebacks. Things are what they are. We'll see soon enough.
 

N305AS

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Aug 20, 2002
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If (I'll still say 'if' because I really want US to succeed) Chapter 7 liquidation becomes a reality, how would this be implemented? Does management have a contingency plan for a controlled, orderly shutdown of company operations or would it be done by the seat of their pants?

My personal belief is that Dave probably has a worst case scenario plan ready to go, and it more than likely includes keeping the Shuttle operating as a going concern (to maximize its value in a sale) while looking for suitors to purchase the entire company outright, or at least the Shuttle.
 

oldiebutgoody

Veteran
Aug 23, 2002
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www.usaviation.com
[blockquote]
----------------
On 12/3/2002 10:44:48 AM N305AS wrote:

If (I'll still say 'if' because I really want US to succeed) Chapter 7 liquidation becomes a reality, how would this be implemented? Does management have a contingency plan for a controlled, orderly shutdown of company operations or would it be done by the seat of their pants?

My personal belief is that Dave probably has a worst case scenario plan ready to go, and it more than likely includes keeping the Shuttle operating as a going concern (to maximize its value in a sale) while looking for suitors to purchase the entire company outright, or at least the Shuttle.
----------------
[/blockquote]
I fly the shuttle all the time. It ain't making any money either. I'll bet it's only worth a fraction of whatever U paid for it. I would imagine that deals would be made and that immediately following any "shutdown" that sales of assets would procede quickly, maybe within hours. The only concern for employees is whether they would go with the assets. There are laws which would govern this if U wasn't liquidating, but if they do who knows?
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acmech

Advanced
Aug 20, 2002
183
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Whatever happens to U in BK court is not reaaly my concern, except to say, been there done that with TWA. If a so called white night called American Airlines comes knocking, run folks, run. Just look at the demoralizing damage they have done to TWA. In a few more years, there will not be anything left in St.Louis.
 

N305AS

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Aug 20, 2002
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acmech-

Without AA, there wouldn't have been anything left of TW anyway.

TW with AA = several thousand TW jobs preserved, at higher rates of pay

TW with Chapter 7 liquidation = every TW job eliminated; thousands being added to the unemployment lines nationwide, especially in MO and NY.
 

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