Judge Approves Competing Bids

[UseYourHead]

NewsJudge approves competing bids

 

[AtlanticBeach]

It's boilerplate. Don't read anything into the decision.

 

[700UW]

Your title is misleading, the Judge approved a PROCESS for competing bids, he did approve any actual bids as no one else has submitted one yet.

 

[28yrsnojob]

The break up has started ,organized liquidation

 

[AtlanticBeach]

The break up has started ,organized liquidation

[post="274387"][/post]​

You may be correct, but today's ruling just applies the law in response to the petition for merger. Judge Mitchell would be remiss if he had not allowed for competing bids.

 

[TheDog2004]

If I were jetBloo or Southwest I'd be bidding like crazy to drive the price up.

 

[usair_begins_with_u]

No one chose to believe this was really a liquidation before.. maybe they will now?

Or just keep denying.....

 

[funguy2]

The judge is bound by fiduciary duty to the creditors to obtain the best deal possible. That means an auction must take place to see if anyone can do better than the deal management came up with during their exclusivity period.

This is standard bankruptcy protocol. This is how RSA outbid TPG during US Airways' first BK.

Parker, of HP, has said he expects his deal to prevail. Obviously that is not always the case... We will have to wait and see.

 

[DCAflyer]

The judge is bound by fiduciary duty to the creditors to obtain the best deal possible. That means an auction must take place to see if anyone can do better than the deal management came up with during their exclusivity period.

This is standard bankruptcy protocol. This is how RSA outbid TPG during US Airways' first BK.

Parker, of HP, has said he expects his deal to prevail. Obviously that is not always the case... We will have to wait and see.

[post="274410"][/post]​

That is not true... the judge does not have a fiduciary duty. The lawyers have a fiduciary duty to their clients.

 

[insp89]

No one chose to believe this was really a liquidation before.. maybe they will now?

Or just keep denying.....

[post="274408"][/post]​

Deny What ? Since you're obviously in the know, Please elaborate on the pending liquidation. B)

 

[AtlanticBeach]

That is not true... the judge does not have a fiduciary duty. The lawyers have a fiduciary duty to their clients.

[post="274427"][/post]​

Sorry to split hairs here. The judge has a duty to apply the US Annotated Code. The Code basically states that the Judge is to approve the bid that would be best for the creditors, not the petitioner. The petitioner's attorney has the duty to present the option that is suggested by management and to defend against other bids. The creditor's attorney(s) informs the judge what they believe works best for their client(s) and why.

BTW, the Judge is not required to take the highest bid. The most amount of cash may leave creditors in a worse position if their assets become non-performing and/or devalues the collateral. That is why a partial bid for US may not be accepted as it creditors could end up with a lower return.

 

[funguy2]

AtlanticBeach: Thanks for the correction. As DCAFlyer points out, my wording wasn't quite right.

I think in US's first BK, it was a no-brainer, as RSA offered up a similar deal to TPG, but offered more cash for a smaller equity stake, as I recall. In this case, the two deals were similar enough that it was easy to pick the better deal.

I think the same could be said of the recent ATA BK auction, where LUV offered up a similar amount of cash for less assets (i.e. less gates at MDW). Also, the fact that TZ has been allowed to stay at MDW makes it a better deal for them, since they have already dismantled the IND operation, which was beginning to build up in anticipation of the move.

Anyways, since another bidder for the whole of US Airways is considered unlikely, Parker may be right. HP's bid may be tough to beat. Certainly tougher than the previous two examples.

 

[Flying Titan]

Atlantic -
You've hit on an important point. If there are some very attractive bids for gates and landing rights at restricted airports, the judge may still choose to reject those offers if they don't offer the value of the complete package as presented by AWA and the third-party investors involved in this deal. Because of the broad scope of the proposed merger, I believe it would be difficult for other carriers to come in and pick off assets piece by piece. I just don't think those pieces would add up to the value of the whole (AWA + UAIR).

 

[USA320Pilot]

Funguy2 & Flying Titan:

I agree with your analysis'.

In addtion, Reuters reported, "US Airways officials said no new bids are on the table."

See Story

According to today's WSJ column, Judge Mitchell may look askance at proposals to buy selected assets if they threaten to scuttle the merger, said Roger King, an analyst for independent research firm CreditSights. Asset buyers, he said, "are going to have to make a compelling case that the combined net value for all the parts is worth more than the value of the merged entity."

But major creditors -- such as unions, aircraft suppliers, caterers and credit-card processors -- want US Airways to keep flying and remain an employer and customer, says William Rochelle, a bankruptcy partner at the law firm Fulbright & Jaworski LLP, the newspaper noted.

Regards,

USA320Pilot

 

[delldude]

crowing a little too soon....he(mitchell) gave a 30 day window....much could happen in 30 daze.....

Mitchell also struck language that would have prohibited the airline's unions from speaking out or taking action in opposition to the merger. The unions said in court Tuesday they do not oppose the merger but simply want to preserve their rights in the future.

possible future contractual end around in progress???