jimntx
Veteran
This is not correct. For instance, you have $1.5M in assets, and you owe $500,000. Assets more than double actual debt. However, the $500,000 is due next week, and you only have $100,000 in cash with which to make the payment. You might very well file bankruptcy to protect those assets--particularly if those assets are something like an airplane that may not be easily convertible to cash.
If you default on an unsecured debt, the debtor can attach ALL your assets and force a sale until the debt is satisfied. Outside of bk, no one is going to try to say, "we are only going to attach enough of the assets to repay the debt." Until the public sale, you don't know what any of the assets will bring--usually much less than expected. (In bk, you can maintain the charade that the the assets are worth their "book" value, at least for awhile.)
And, right now, most of us have assets that consist of a/c, maintenance facilities, airport facilities, etc. None of these things is in short supply right now. <_<
Regarding Bear96's comments about reregulation. Right on! Can you imagine the stink that would be raised if a new CAB ruled that only UA could fly the DEN-ORD route. AMR would be crying foul in a heartbeat. Or, only AMR could fly DFW-New York. CO would be on that like white on rice. Granted, some of our current problems stem from industry deregulation, but only indirectly. The problems are of our own making. We all tried to serve the same lucrative markets at the same time at a lower price than anyone else in that market. We all tried the "yes, we lose money on every seat we sell, but we're going to make it up on volume/frequency" approach. It didn't work in the Aggie joke, and it doesn't work in the airline business either.
