Interesting news about SABRE

Biffeman

Senior
Nov 25, 2002
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www.usaviation.com
[P]At the Dec. 12 hearing, US Airways also will seek court authorization to examine Electronic Data Systems Corp. (NYSE:[A href=http://finance.yahoo.com/q?s=eds&d=t]EDS[/A] - [A href=http://biz.yahoo.com/n/e/eds.html]News[/A]) under Bankruptcy Rule 2004. In a separate court filing Monday, US Airways accused EDS of failing to honor the most favored customer clause of its contract by providing better pricing and terms to American Airlines Inc. (NYSE:[A href=http://finance.yahoo.com/q?s=amr&d=t]AMR[/A] - [A href=http://biz.yahoo.com/n/a/amr.html]News[/A])
[P]US Airways said that it pays EDS more than $200 million a year for data processing and telecommunications services. The services, formerly provided by Sabre Group Inc., are crucial to the airline, the filing said.
[P]An amended information technology services agreement reached with Sabre and assigned to EDS in July 2001 gives US Airways pricing and other service terms and conditions comparable to those provided to American Airlines.
[P]US Airways said that American Airlines renegotiated its agreement with EDS at the beginning of the year to get more favorable pricing and terms. EDS disputes this.
[P]In requesting a Rule 2004 examination, US Airways wants access to the renegotiated American Airlines agreement so that it can determine whether the terms are more favorable than those contained in its own pact with EDS.
[P]Bankruptcy Rule 2004 allows parties to investigate a debtor''s business, records and employees, provided they get court approval.
[P]Objections to the carrier''s Rule 2004 motion are due Tuesday.
[P]Separately, the court on Wednesday signed a bridge order temporarily extending the company''s exclusive period for filing a Chapter 11 reorganization plan through Dec. 12, when it will consider the US Airways'' bid to extend exclusivity through Jan. 31, 2003. Exclusivity was set to expire Dec. 9.
[P]The company has maintained it will seek to emerge from Chapter 11 bankruptcy protection in early 2003. The Retirement System of Alabama''s agreement to invest $240 million in the company in exchange for an equity stake in the reorganized airline requires the company to file its reorganization plan by the end of the calendar year.
[P]US Airways listed about $7.81 billion in assets, $10.65 billion in liabilities and $8.3 billion in annual operating revenue when it filed for Chapter 11 protection on Aug. 11. [/P]
 

diogenes

Veteran
Aug 22, 2002
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And if an aging memory serves, EDS was hauled in front of Congress regarding some questionable accounting practices so in vogue of late.
 

diogenes

Veteran
Aug 22, 2002
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And if an aging memory serves, EDS was hauled in front of Congress regarding some questionable accounting practices so in vogue of late.
 

TomBascom

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Aug 20, 2002
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www.greenfieldtech.com
I don't recall them ending up in front of Congress over it but Wall Street was looking at certain "off balance sheet" stuff with concern. Basically they buy hardware from or on behalf of their customers in outsourcing deals -- which is a lot different from the Enron sorts of shenanigins. At least there's a real asset floating around somewhere. EDS stock eventually got hammered really hard a few months back because they missed earnings estimates by a few zillion miles. Some might argue that that was a case of "check kiting" of sorts coming back to bite them.

I wouldn't get my hopes up over this -- EDS faces down unhappy customers all the time. Even if they lose it's generally peanuts.
 

TomBascom

Veteran
Aug 20, 2002
660
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3A
www.greenfieldtech.com
I don't recall them ending up in front of Congress over it but Wall Street was looking at certain "off balance sheet" stuff with concern. Basically they buy hardware from or on behalf of their customers in outsourcing deals -- which is a lot different from the Enron sorts of shenanigins. At least there's a real asset floating around somewhere. EDS stock eventually got hammered really hard a few months back because they missed earnings estimates by a few zillion miles. Some might argue that that was a case of "check kiting" of sorts coming back to bite them.

I wouldn't get my hopes up over this -- EDS faces down unhappy customers all the time. Even if they lose it's generally peanuts.
 

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