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On 12/1/2002 3:53:17 PM geeman10 wrote:
UA WILL ALWAYS OWE MONEY TO SOME ONE
BUT HOW ABOUT THE MEN & WOMEN WHO HAVE BEEN
WAITING FOR OVER (2)YEARS ON THE RETRO ???
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The simple answer is that you're secured creditors, exactly as if you were a bank that had lent UAL 500 Mil at 6% interest with quarterly payments for the next two years, secured by land and buildings (WHQ, I guess).
Yes, I know that everyone worked very hard and endured grueling, drawn out negotiations with parsimonious UAL management, that the 500M amount represents wages that should have already been paid, and so on. But IF UAL goes into bankruptcy, none of that matters one whit. The only thing that matters is the amount of the loan, the collateral backing your security interest, and the time when that security interest was established. Essentially all the creditors get lined up, and the funds go to certain groups first, then to other groups, and so on down the line until you reach common shareholders, who usually wind up with squat.
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The good news is that as a secured creditor you'll likely take precedence over most other creditors, and hopefully A) no one else has a security interest in the collateral backing the loan (again, retro pay is essentially a loan) and B) the collateral has a value greater than the loan amount. There are a LOT of creditors who lent money for aircraft who aren't very happy now.
But in BK, it doesn't matter why UAL owes you the money. It doesn't matter if you are a bunch of hard working people who sweated for every penny of the money that you "should" have received years ago, or if you are a multi-billionaire who just lent UAL a half-billion for the heck of it. You're a secured creditor, period, and you'll get paid when all the debts are worked out and assets are split up among the creditors. This is another good reason to avoid Bankrupcy if at all possible!!
Yes, it blows. Ya think I'm happy about it? My wife is owed a nice chunk of retro, we're saving for a house and want to start our family soon, we could use that retro. But nobody cares, certainly not the other creditors who are looking out for THEIR best interest.
Speaking of which: IIRC, the 141-M deal was signed a few months before the 141 deal. I wonder if this means there are two separate security interests in WHQ, one for the 141-M retro and one for the 141 retro. I don't think so, but who knows?
-synchronicity