Now with the merger imminent, we must revisit an old friend, Change of Control. Now the question isn't if US AIRWAYS is going to stand alone but rather who is going to pick it up?
Hemenway has a fleet service contract till 2009 but was compelled to come to us and try to peel off this change of control language.
In this context, the change of control has big teeth. Notice, the arbitrator further defined the COC and only ruled against it because the conclusion was that US AIRWAYS set up a series of investors not acting together. From the judgement,:
"...In seeking to raise capital, the Company shook a lot of different trees,
beginning in February of 2005.5 Prospective investors responded with a variety
of demands. Eastshore, an Air Wisconsin affiliate, committed to $125 million as
a debtor in possession. But the stipulation was that US Airways would use Air
Wisconsin as a US Airways express brand.6 An appeal to Republic Airways,
which involved the sale of slots at LaGuardia and DCA by US Airways to
Republic, was ultimately unproductive.7 Similarly, ACE Aviation invested $75
million, a commitment that included an agreement to perform maintenance work
for US Airways.8 Two private equity funds, Par and Peninsula, committed,
respectively, $100 million (a 10 percent ownership stake) and $50 million, (a five
percent ownership stake).9 A public-company investor fund manager,
Wellington, paid $150 million for a 13 percent ownership stake: It paid $16.50
per share, a premium price compared to prior investors. 10 The Tudor company
paid $65 million for a six percent share, which represented a still-higher price
than was paid by Wellington.
There is no evidence in the record that the disposition of stock to the
varied recipients was anything other than a series of unrelated bargains between
the Company and the individual investment entities. This is relevant to both the
nature of the purchase and the purchasers. If one may describe the buyers as a
group, they were surely not acting in concert: There is no evidence whatsoever
these investors somehow planned with one another to acquire an interest in US
Airways."
In the context of mergers, it seems more than reasonable to conclude that Hemenway can't walk away from the negotiations table without finishing up this housekeeping matter.
Fleet service's Change of Control may finally have the teeth it was suppose to have.
Vote the Wal Mart contract down and force Hemenway to give a more reasonable vacation schedule and a more respectable industry wage. Hemenway's hand is shown fellas, He has to get rid of this, he may have waited too long since now everyone admits the merger is going to happen.
Send the rag back because it is horrible. Give up the Change of Control for more favorable terms.
One thing I know, is that anyone who says the Change of control isn't worth anything is nuts. Not in this context of mergers.
The New Tentative Agreement Summary Sheet
regards,
Tim Nelson
IAM Local Chairman, 1487, Chicago
email: appearances1@aol.com