Outstanding common stock


Aug 19, 2002
Well, we finally got an answer from Dave about the stock. Yesterday in the IAM meeting we were told the "intent" was to bring the common stock through the bankrupsty and it would trade when we emerged diluted by the new positions of Texas Pacific and others. I guess someone read too much into that intent. Dave told us, prefaced by saying he had to be careful because of legal issues, that the common stock is worthless and he has too many parties to give the new stock to. He can''t afford to give it to the old stakeholders too. Ouch, that hurt. And I''m told I can''t even write the 401k loss off on my taxes because that that income was never taxed. Just how much money will a mattress hold? I''m leaving the market to the big guys. Know how to become a millionaire? Invest 2 million.
Sorry to here good old Dave sold us out. Maybe we should start lobbying our govt reps for tax breaks on 401ks that were adversely affected by the results of 9/11. Maybe good old Dave will put in a good word with the politicians as long as he is up in DC... naw, he'll be to busy lobbying the judge for management bonuses. Just when we have a chance to flush this company of bad mangement he wants to give them retention incentives. As if these people that couldn't make a decision if their lives depended on it were going anywhere.
I'm not happy about the stock going to essentially zero either. But all who own it (including myself) have known for quite some time that U had a pretty poor prospect as an investment.

From a purely CEO perspective I think Dave has no choice but to make existing stock worthless. That relieves tremendous debt and allows for better utilization of the Chapter 11 process, which is to enable U to get out from under all the debt. Don't blame Dave for doing what he must in order to keep the company alive. As much as it hurts me to say this, I think this is the right move with regard to honoring existing stock.

I know I have learned not to invest in my own company even it if looks like a good deal. Too many eggs in one basket. I think the employee/stockholders at Enron would probably agree with me.
It is a very good decision for Dave. His good friend David Bonderman will end up with 38% of the company. He will make a killing. I'm sure the 5 board members that he will choose will be very generous to good old Dave. Use investors money to get you out of the hole management dug, then bonuses all around for great management. There was an unusualy unlucky sequence of events leading up to the fall of U, but inept management has been dragging us down all along. After the post 9/11 cutbacks Rakeesh said we are stronger than we ever have been, then he left. Wolf said we would be cash flow positive by June, then he cut out. Dave said we were going to do a voluntary restructure, then he screwed all the stockholders to pay people off and give a chunk of the airline to his buddy. Then he gives mangement bonuses. IMHO Dave is lacking credibility. The CWA members and ramp have been giving industry leading service and all Dave wants to do is squeeze them as hard as he can and use them as an excuse for giving the airline away. Meanwhile our worst in the industry management, as evidenced by our being driven to bankruptcy deserve bonuses? Give me a break. Dave is no friend of mine.
Dave did not throw US into bankruptcy. He chose to join and lead a firm that was a complete disaster when he started, and he's trying to fix it as best as he can. If it weren't for him, you very well could have been in Chapter 7 liquidation proceedings about now (with 35,000 people on the street), with Wolf at the helm. Give the guy some credit -- he's working very hard and being more responsive to employees than any CEO you've had in decades! You might not like what he's saying/doing, but he's trying... which is more than we can say for past management.
Simfixer, I would encourage you to attend one of Dave's road shows. While I understand your frustation and misunderstandings about what is going on, you should attend an employee meeting and get some cold hard facts. Things aren't what they seem. Please get the facts.
I heard that Dave is setting aside 6 million dollars for bonuses for certain personell while at the same time he is "asking" others to take "deep" cuts. I know this can't be fact, What would the judge think ?

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