More Fleet Finance Trouble

[SVQLBA]

Just when it looked like UAL had cleared a major hurdle, maybe it hasn't. Can someone post the filing the news item refers to?
RockyMountainNewsArticle

Rocky Mountain News

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URL: http://www.rockymountainnews.com/drmn/busi...4005024,00.html
United's plan for jets hits snag
Carrier says creditors sold debt on 14 planes

By Chris Walsh, Rocky Mountain News
August 16, 2005

United Airlines' plan to buy and then refinance $293 million in senior debt on 14 of its aircraft has hit a snag, a potential setback as the carrier attempts to emerge from bankruptcy protection by early next year.

Creditors who own the debt dispute the calculations United used to determine the purchase price, saying the carrier should cough up about $65 million more, according to bankruptcy court documents.

So the creditors apparently sold the debt to another entity under their control at the purchase price they wanted, United said.

The nation's second-largest airline claims the sale violates certain agreements that prohibit the creditors from selling the debt while negotiating new finance terms. United also said it was not informed of the sale until six days after the transaction.

[snip]
The Chicago court overseeing United's restructuring is expected to take up the issue at a hearing today.

[snip]

The carrier's plan, which received bankruptcy court approval last week, involves buying the senior debt on the planes and then refinancing the purchase under better terms through an agreement with JPMorgan Chase. The move ultimately would lower United's payments.

Creditors had thus far agreed not to repossess the planes as they worked on new financing terms with United, and the carrier appeared to have wrapped up the issue last week when it receive court approval to buy the senior debt on the planes.

But United says its jets could again be in jeopardy.

"There is no assurance that the controlling party will continue to forebear in exercising its right to repossess the aircraft," United wrote in a court filing.

The trustee for the creditors said the planes are not in jeopardy and argues that United is trying to "force" a purchase.

United filed for Chapter 11 bankruptcy in late 2002 and expects to emerge by early next year. The carrier made significant progress toward emerging from bankruptcy last week, announcing it essentially had finished efforts to renegotiate its aircraft leases.

Aside from the deal involving the 14 planes, United also announced an agreement to refinance terms on another 105 of its 455 planes.

Copyright 2005, Rocky Mountain News. All Rights Reserved.

 

[uafa21]

Another leasing company going to play hardball with Ua? Most lessors have assignment rights to sell or assign leases to other lessor's.

If Ua were making payments per the lease and not asking to re-negociate then no problem, instead Ua is trying to dirty the lease.

 

[Imagolfer]

And this from Crains Chicago Business:

Crain's Chicago Business reports that observers who think they've seen it all in United Airlines' chaotic bankruptcy are scratching their heads over the case of the vanishing jumbo jet. A Boeing 747 that had been part of United's fleet for nearly 15 years was reclaimed Aug. 5 at Chicago's O'Hare International Airport (ORD) by its owner, Wilmington Trust Co. The next day, United settled a lengthy dispute with leasing companies that own 105 other aircraft in its fleet. While United says it voluntarily returned the aircraft, people close to the lessors say the jet was repossessed - unusual for a major airline - as a negotiating ploy. The maneuver pressured United execs to reach a deal with financiers who control about one-quarter of its 450-aircraft fleet, they contend. Either way, the airline lost a wide-bodied jet for its lucrative overseas routes at the height of the summer travel season. "United probably didn't want to give up that airplane at that particular point," says Glen Langdon, president of Langdon Asset Management Inc. in San Francisco, which leases aircraft. Adds turnaround expert William Brandt: "When somebody pops an airplane out of you, it gets your attention. It's also embarrassing." A United spokesman has another take. "We'd made competitive offers on the aircraft and it was not in our financial interest to pay the rates they were seeking," he says. "We did return it. It did not impact our schedule or operations." Lawyers for the leasing firms and a Wilmington Trust spokes-woman did not return calls. Wilmington still has the plane, which is parked in the Mojave Desert

 

[whatkindoffreshhell]

This is why Jake Brace gets the big money and perks!

(shhhh, this missing jumbo is being re-deployed to TED to provide a seamless transition out of BK while maintaining our valued customer's loyalty -- dontcha-watch-those-pastel-commercials-?-ain't-they-great)

"At least our BK consultants and lawyers like us!! They really do!!"

 

[iflyjetz]

The repo had a negative impact on UAL's schedule. It rippled through the fleet with downguaging many flights. However, the impact of the repo has subsided; load factors are decreasing to the point where downguaging is a prudent course of action. Available lift will not be an issue for UAL until next summer's travel season.

 

[coolflyingfool]

Are these 14 planes in question all widebodies? Are any B777 or B747-400's? Just wondering........