This is why a DAL merger won't happen.

the Debtor's would then file an 1113 motion to reject the CBA.
And assuming that the debtor's in this case aren't persuaded to support the merger and file a 1113 motion, how many times has another "interested party" filed such a motion and been successful?

After all, wasn't that your previous point - since DL management and DALPA are aligned on the merger someone else could file the 1113 motion? I think you mentioned the creditors committee, which supported the motion to approve LOA 51.

Jim
 
And assuming that the debtor's in this case aren't persuaded to support the merger and file a 1113 motion, how many times has another "interested party" filed such a motion and been successful?

After all, wasn't that your previous point - since DL management and DALPA are aligned on the merger someone else could file the 1113 motion? I think you mentioned the creditors committee, which supported the motion to approve LOA 51.

Jim


Touche Jim. I am the first to admit that such circumstances do not present themselves very often... that is the precise reason why I always bolded the cautionary word 'may'.

However, despite its limited frequency, it has happened in the past. I am aware of a couple (sure there are more out there). One, in particular, was in the packaging industry. There the court stated that because the debtor did not attempt to reject the CBA, the Unsecured Committee had the ability to file the motion. Eventually, the committee was successful in its 1113 motion.

By the way Jim, I limit this to only the Debtor and 'possibly' the creditors' committee... not the more encompassing 'interested party.'

And as stated earlier, this is all likely moot, as these things will likely be solved through alternative means.

Added: I enjoy keeping abreast of, and making others aware of, the potential strategies that, historically, may exist through the bankruptcy/merger process. When you add that to my interest in the airline industry, it makes for a noxious combination.
 
Fair enough - all I've been saying all along is basically the same. Rejection of the DALPA PWA could happen but is unlikely (short of something that would threaten liquidation).

Besides, as I alluded to, I've got another "pet theory" for a possible way around all this that hinges on DL being the surviving entity in this merger, much like US Group was the surviving entity in the HP/US merger.

Jim
 
Touche Jim. I am the first to admit that such circumstances do not present themselves very often... that is the precise reason why I always bolded the cautionary word 'may'.

However, despite its limited frequency, it has happened in the past. I am aware of a couple (sure there are more out there). One, in particular, was in the packaging industry. There the court stated that because the debtor did not attempt to reject the CBA, the Unsecured Committee had the ability to file the motion. Eventually, the committee was successful in its 1113 motion.

By the way Jim, I limit this to only the Debtor and 'possibly' the creditors' committee... not the more encompassing 'interested party.'

And as stated earlier, this is all likely moot, as these things will likely be solved through alternative means.

Added: I enjoy keeping abreast of, and making others aware of, the potential strategies that, historically, may exist through the bankruptcy/merger process. When you add that to my interest in the airline industry, it makes for a noxious combination.

What company was that, and in what year? The "Unsecured Creditors Committee" include the labor groups. My query is what company was in BK where the Debtor did not file a 1113 and the unsecured creditors went ahead and did file an 1113 motion and were successful?
 
What company was that and in what year? The "Unsecured Creditors Committee" include the labor groups. My query is what company was in BK where the Debtor did not file a 1113 and the unsecured creditors went ahead and did file an 1113 motion and were successful?


I believe it was Parrot Packing Company. I am positive, however, that it was the local United Food and Commercial Workers Union involved. The bankruptcy was drawn out, early-to-mid 80's. If you would like the precise citation, I will look it up when I have a moment.

By the way, the Unsecured Creditors' Committee does not ALWAYS include the labor groups. The Unsecured Creditors' Committee is typically made up of the 7 largest unsecured creditors. Sometimes that will include the labor groups, sometimes it will not. The '7 creditors' is a guideline, however. That is why the DL committee contains 9 members.

I am not sure whether the Union in the Packaging Company was a member of unsecured committee during that bankruptcy.
 
Yes, I would appreciate that.

The unsecured creditors committee at U during BK #2 included ALPA, CWA, IAM and AFA as voting members of that committee and believe in total, there were 12 members.

Unlike BK #2, in BK #1, 2002, an 11113 would not be pursued if each labor group ratified their respective T/As.

In BK#2 U (Debtor) moved to file 1113c, 1113e and 1114. The judge ruled in favor of 1113e, 1114 and 1113c abrogating pensions and the IAM CBA on Jan. 10, 2005.
 
I believe it was Parrot Packing Company. I am positive, however, that it was the local United Food and Commercial Workers Union involved. The bankruptcy was drawn out, early-to-mid 80's. If you would like the precise citation, I will look it up when I have a moment.

By the way, the Unsecured Creditors' Committee does not ALWAYS include the labor groups. The Unsecured Creditors' Committee is typically made up of the 7 largest unsecured creditors. Sometimes that will include the labor groups, sometimes it will not. The '7 creditors' is a guideline, however. That is why the DL committee contains 9 members.

I am not sure whether the Union in the Packaging Company was a member of unsecured committee during that bankruptcy.

Near as I can tell, Parrot Packing Company's Chapter 11 case originated in the Northern District of Indiana in 1983. Congress did not enact the current S1113 until 1984. Apples and oranges.
 
Near as I can tell, Parrot Packing Company's Chapter 11 case originated in the Northern District of Indiana in 1983. Congress did not enact the current S1113 until 1984. Apples and oranges.

That's why knowing the year Lily is referring to makes the difference. What "unsecured creditors' committee" would file an 1113, if the debtor and labor are not on board? How successful of a restructuring/reorganization can there be?

Thanks Clue.
 
I guess it comes down to the specifics, so let's lay them out in this case so there's an apples to apples comparison....

1 - Debtor files an 1113c motion

2 - Debtor and union reach agreement on contract changes before judge rules on 1113 motion

3 - Debtor files motion for approval of agreed to changes in union contract

4 - Unsecured creditors committee files statement supporting motion to approve negotiated changes to union contract with only 2 unsecured creditors objecting to motion to approve changes.

5 - Judge approves negotiated changes to union contract, overruling objections.

Now the questions - assuming no event that threatens survival of the debtor...

1 - Given that set of circumstances, what are the chances that the unsecured creditors committee (or any other creditor) will file an 1113 motion?

2 - What are the chances of success if such a motion should be filed by the unsecured creditors committee (or any other unsecured creditor)?

Jim
 
Near as I can tell, Parrot Packing Company's Chapter 11 case originated in the Northern District of Indiana in 1983. Congress did not enact the current S1113 until 1984. Apples and oranges.


Yes, it originated in 1983 as you noted. And yes, it was before the enactment of 1113. However, before 1113, there was 1109... which, along with 1103 and 365, served as the direct predecessor to 1113 and in which the power of the committee to reject the CBA was found.

Interestingly, 1109 is still is in effect as it was in 1983 and, thus, unless notified otherwise, that power is still possible through 1109 and 1113. No court has stated that the committee never has standing to file an 1113 motion.

In fact, if you look at the annotations to the CURRENT bankruptcy code, it will mention the following: "Creditors' committee has standing under 11 USC § 1109 to seek rejection of debtor's collective bargaining agreement under predecessor to 11 USC § 1113 where debtor has unjustifiably refused to act and debtor sees rejection of agreement as necessity for proper reorganization"

Thus, the holding still stands: "Creditors' committee has standing to seek rejection of the collective bargaining agreement."

But again, it is highly unlikely that DL, or the creditor's committee will do that here, as I suspect that any additional problems will be resolved via alternative means.
 
Yes, I would appreciate that.

The unsecured creditors committee at U during BK #2 included ALPA, CWA, IAM and AFA as voting members of that committee and believe in total, there were 12 members.

Unlike BK #2, in BK #1, 2002, an 11113 would not be pursued if each labor group ratified their respective T/As.

In BK#2 U (Debtor) moved to file 1113c, 1113e and 1114. The judge ruled in favor of 1113e, 1114 and 1113c abrogating pensions and the IAM CBA on Jan. 10, 2005.


Great back and forth.

Just one clarification. On the pilots pension, the judge told the company that they would have to negotiate the plan away as he, the judge, could not pencil whip it.

With at least four of twelve members of the MEC former "Shuttle" dudes who, otherwise would never have access to the USAir DB plan, terminating the plan became a prime function, guaranteeing them some $2300 plus per month income from a plan they otherwise would never have access to. This is $2300 plus per month in addition to their Eastern PBGC as well as their Shuttle plan.

For the ex-shuttle dudes to benefit, the plan had to be terminated. It could not be frozen. Even though the company asked the union to freeze the plan numerous times, certain parts of the MEC would not respond.

It seems our "enemy" is not necessarily the company.
 
2 - What are the chances of success if such a motion should be filed by the unsecured creditors committee (or any other unsecured creditor)?

Jim

I've asked the same question above. I can't see any unsecured creditors' committee in any bk scenerio filing a motion of 1113 and betting on success of a restructuring.
 
I've asked the same question above. I can't see any unsecured creditors' committee in any bk scenerio filing a motion of 1113 and betting on success of a restructuring.


I agree with you Pitbull. I think it is highly unlikely; but it is a strategic option (well maybe in the current situation 'strategic' is a bit of a stretch).

It is probably similar to a 'nuclear option'... in which case all heck would break loose upon the filing of such a motion. At very best, the creditors' committee would only consider it if they wanted a certain merger deal and could not use any other possible option. Even then, it would still be unlikely, and even more unlikely that a motion would succeed because of the stringent test required.
 
Because the issue was never resolved in an 1113 order, DL (or creditors' committee) may complete those same steps and ask for rejection without even asking the court to overturn the 363 decision.

Further, because the PWA has not been assumed as of yet (actually said to not be assumed in the order), it may be done away without overturning the 363 order.

And, you have inside information that the creditors' committee is gung-ho for this merger and interested in overturning the agreement with the pilots? You keep telling us in detail how it can be done, but you have yet to mention anyone who wants it done-- well, anyone who has standing in the BK court.

I might have a foolproof way to save DL and pay off all the creditors in full. BUT, until I can convince the creditors committee or DL management of that fact, I have no way to present that info to the court. You have yet to give us a name, other than by supposition (i.e., the creditors' committee or DL management could do such and such or so and so.

Who exactly, with standing in the case, is going to do this? I've seen nothing to indicate that anyone is for this merger beside Parker and co. Again, Bethune never said it was the best deal for DL or its creditors just that it COULD be a good deal.