Mesa Air files bankruptcy

[SegmentKing]

There is already an agreement in place for EN to acquire the Mesa Dash 8s and operate out of PHX sometime later this year.

Current millings from both YV and US is that YV will be removing only 3 CRJ 900s from the fleet. US-East pilots need to be informed that AWA MEC allowed all of these CRJ 900s on property a few years ago and they were grandfathered in to the "big RJ" category. Republic added a lot more E170s and E175s after the fact.

 

[FWAAA]

I believe both of the comments below are inaccurate:

Your beliefs are wrong. What I posted is completely accurate. You're obviously not well versed in federal bankruptcy law. You're an airline pilot, not a bankruptcy lawyer.

Mesa will have the option to terminate any contracts it wants to terminate and will have the option to affirm any contracts. Parties dealing with debtors have no unilateral right to terminate contracts with debtors.

 

[Elevation]

Your beliefs are wrong. What I posted is completely accurate. You're obviously not well versed in federal bankruptcy law. You're an airline pilot, not a bankruptcy lawyer.

Mesa will have the option to terminate any contracts it wants to terminate and will have the option to affirm any contracts. Parties dealing with debtors have no unilateral right to terminate contracts with debtors.

If the BK Judge (Mesa can't do it) affirms the current contract between US and Mesa well that includes an out for US due to Mesa being Ch 11(it's in the contract). If the Judge cancels the contract US leaves any way.

 

[Kneecaps]

Your beliefs are wrong. What I posted is completely accurate. You're obviously not well versed in federal bankruptcy law. You're an airline pilot, not a bankruptcy lawyer.

Mesa will have the option to terminate any contracts it wants to terminate and will have the option to affirm any contracts. Parties dealing with debtors have no unilateral right to terminate contracts with debtors.

So uh.. You think that those 3 major airlines (DAL,CAL,LCC) all put bankruptcy exit clauses into their contracts for umm.. nothing? :unsure:

You are correct that contracts can be abrogated.

However, a contract provision specifically relating to filing bankruptcy can not. Its there for this specific reason in the case of all of MAG's and every other regional's contracts throughout the industry. They dont put these clauses in for 'Fun'.

 

[FWAAA]

If the BK Judge (Mesa can't do it) affirms the current contract between US and Mesa well that includes an out for US due to Mesa being Ch 11(it's in the contract). If the Judge cancels the contract US leaves any way.

Your lack of knowledge of US bankruptcy law is showing.

The debtor in possession (Mesa execs will be in charge) will determine whether to reject or affirm its contracts. If Mesa affirms the contract, US will not be able to terminate it due to Mesa's Ch 11 filing.

 

[BoeingBoy]

Or Mesa could take a page from US' BK playbook and take a year or more after exiting BK to decide whether to abrogate/assume the US contract...

Jim

 

[700UW]

If the contract has an out clause because of Chapter 11 US has the right to exercise it, the clause would not have been in the Contract if it is against the current bankruptcy laws.

 

[Dog Wonder]

The honorable members of the bar on this forum are grossly underpaid.

 

[Kneecaps]

Interesting article (2 years old though) about how bankruptcy clauses are often not held up in courts:

http://bankruptcy.cooley.com/2007/09/artic...es-enforceable/

 

[700UW]

I sat through several of the hearings during the second BK and was on the NC, US's clause is enforceable, but has Mesa can fight it in in court.

 

[SparrowHawk]

Here's a question that's been rolling around in my head.

Could US snatch up the entire Mesa operation at a cheap enough price to make Doug pull the trigger and buy them?

The obstacle would seem to be the amount of cash required to complete a transaction.

 

[Dog Wonder]

I sat through several of the hearings during the second BK and was on the NC, US's clause is enforceable, but has Mesa can fight it in in court.

Does sitting several Panthers game make one an NFL Head Coach?

A referee?

A screaming fan of the cause who has no effect?

 

[USA320Pilot]

Mesa Airline's SEC 10K report dated September 30, 2008 states: "If either US Airways or we become insolvent, file for bankruptcy or fail to pay our debts as they become due, the non-defaulting party may terminate the agreement."

See story

700UW said: "If the contract has an out clause because of Chapter 11 US has the right to exercise it, the clause would not have been in the Contract if it is against the current bankruptcy laws."

USA320Pilot comments: I agree with 700UW. Moreover, US Airways' "fee for service" contract with Mesa expires in less than 12 months on January 1, 2011. In my opinion, US Airways and Mesa may negotiate new agreements for some of Mesa's aircraft to remain in US Airways Express service; however, Mesa's SEC 10K report specifically states, "If either US Airways or we become insolvent, file for bankruptcy or fail to pay our debts as they become due, the non-defaulting party may terminate the agreement." And, US Airways has the right to remove all Mesa flying from the legacy carrier's network in less than 1-year regardless of the agreement listed in the 10-K report.

Regards,

USA320Pilot

 

[john john]

Here's a question that's been rolling around in my head.

Could US snatch up the entire Mesa operation at a cheap enough price to make Doug pull the trigger and buy them?

The obstacle would seem to be the amount of cash required to complete a transaction.

Mesa and HP had a lot of similarities. Agent pay and work rules at HP was computable to mesa pay. This would be a way to try to drop down to their level.Put them on the shuttle

 

[RowUnderDCA]

FWAA-

I'm not clear on whether or not USA320 is saying that the US/Mesa contract completely expires in Jan '11, or if just parts of it, but even if a bankruptcy proceeding and a bankruptcy judge could prevent US from exercising its contractual rights to cure under the default provisions of the US/Mesa contract, is it possible that a bankruptcy judge could prevent US from simply walking away from the agreement at its expiration in 2011?

It would seem that that date is US's bigger leverage with Mesa, not the Bankruptcy filing, unless a bankruptcy judge could force US to continue past the expiratin date.