Today's Proposed Merger News

[USA320Pilot]

PilotAction Merger News for US Airways & American Airlines: September 23, 2013

Is the Justice Department Picking on American, US Airways?

See Story: http://wallstcheatsh...ys.html/?ref=YF


American Airlines and US Airways Extend Merger Agreement

See Story: http://www.prnewswir...-224848162.html


AMR, US Air Extend Merger Termination Date

CHICAGO (WSJ.com) - American Airlines parent AMR Corp. and US Airways Group, Inc. said Monday they agreed to extend the termination date of their merger agreement by a month to Jan. 18 to allow for a trial in which they intend to challenge U.S. Justice Department objections to the deal.

As expected, the pair pushed back the outside date by which either party may terminate the agreement, which had been Dec. 17. They notified the Securities and Exchange Commission on Monday that if there is an unfavorable ruling by the U.S. District Court judge in Washington, D.C. who will hear the case, the two may terminate the merger agreement five days after the judge enters a final, but appealable, order enjoining the combination. If the judge rules in their favor on or before Jan. 17, the companies said, either side could terminate the accord on the 15th day following that order. The trial is slated to begin Nov. 25.

Tom Horton, AMR's chief executive officer, and Doug Parker, CEO of US Airways, said in a statement that both airlines' boards and management teams remain committed to completing the transaction and the extension of the merger termination date reflects that. "Our focus is on mounting a vigorous defense and winning our court case so the new American can enhance competition, provide better service to our customers and create more opportunities for our employees," they said.

The proposed stock-swap combination is AMR's plan to emerge from bankruptcy-court protection. AMR creditors, US Airways shareholders, both airlines' boards and most of their unions and European Union regulators have approved that path to exit. But the Justice Department on Aug. 13 surprised nearly everyone by challenging the transaction, saying it would raise fares and fees, rob consumers of choices and essentially create an oligopoly in which the top four U.S. airlines would control more than 80% of domestic capacity.

US Airways and AMR disagree, and have questioned why the Justice Department is attempting to stop their combination when the agency has allowed four other large airline mergers since 2005. Without a merger, American and US Airways contend they won't be able to scale up to provide a counter-weight to United Continental Holdings and Delta Air Lines Inc., two companies that have bulked up through recent mergers and now are far larger than American in traffic.


American Airlines, US Airways extend deadline to complete merger

The two airlines also said they’ve formally dropped the letter of agreement with AMR CEO Tom Horton that would have paid him nearly $20 million after the merger was completed and he stepped down from his position as CEO.

See Story: http://aviationblog....te-merger.html/


AA and USAIr Want More Time to Merger: here’s Why.

The airlines are doing their best to pressure the Justice Department to settle the case as early as possible. Of course, they will only take a settlement that doesn’t completely gut the new company. Experts say that the best course of action on both sides would be a settlement, where the Justice Department could claim victory and the airlines would still get their merger.

See Story: http://www.tulsaworl...Heres_why/22342


Cowen Says Overweight the Airlines: U.S. Airways-AMR Deal Likely Gets Done

See Story: http://finance.yahoo...-125011512.html


American Airlines And Qatar Airways Strengthen Relationship With Reciprocal Frequent Flyer Program Agreement

See Story: http://online.wsj.co...923-905481.html


American Airlines to DOJ: Why Did You Approve Other Mergers?

See Story: http://seekingalpha.com/article/1708842-american-airlines-to-doj-why-did-you-approve-other-mergers?source=yahoo


S&P Raises US Airways Credit Rating

See Story: http://finance.yahoo.com/news/p-raises-us-airways-credit-202717870.html


American Airlines CEO Tom Horton’s Severance Stricken From Merger Deal

See Story: http://aviationblog.dallasnews.com/2013/09/its-official-horton-wont-get-his-money-at-least-not-until-after-the-merger.html/


DOJ tells unions “settlement option” available just very difficult for American, US Airways to provide

See Story: http://blogs.star-telegram.com/sky_talk/

 

[USA320Pilot]

PilotAction Merger News for US Airways & American Airlines #4: September 23, 2013

APA INFORMATION HOTLINE: September 23, 2013

This is APA Communications Director Gregg Overman with the APA Information Hotline for Monday, Sept. 23.

AMR AND US AIRWAYS EXTEND MERGER AGREEMENT: AMR and US Airways announced today that they have agreed to extend the merger agreement between the two companies. Previously scheduled to terminate Dec. 17, the agreement now extends "to the later of Jan. 18, 2014, or, if the court enters an order on or before Jan. 17, 2014, in favor of American and US Airways, on the 15th day following the entry of such order. In the event of an unfavorable ruling by the court, AMR or US Airways may terminate the merger agreement five days after the court enters a final, but appealable, order permanently enjoining the merger." The press release announcing the extension notes that "further details about the amended Merger Agreement will be contained in Forms 8-K to be filed by each company today with the Securities and Exchange Commission."

APA is pleased the two companies have decided to extend their merger agreement. We look forward to a prompt resolution of the Justice Department's lawsuit and the merger's consummation.

That's it for now. Thanks for checking this hotline.

 

[USA320Pilot]

PilotAction Merger News for US Airways & American Airlines: September 24, 2013

AMR, US Airways Seek Names of U.S. Merger Suit Sources

See Story: http://www.bloomberg.com/news/2013-09-24/amr-us-airways-seek-names-of-u-s-merger-suit-sources.html?cmpid=yhoo


US Airways to DOJ: To whom have you been talking?

See Story: http://www.charlotteobserver.com/2013/09/24/4339570/us-airways-to-doj-who-have-you.html#.UkJquIaTh8E


US Airways, American Airlines want to know whom the Department of Justice talked to before it filed antitrust lawsuit

How should we interpret this? Perhaps that US Airways and American Airlines think there are fingerprints of other airlines to be found on the knife stuck in their back?

See Story: http://aviationblog.dallasnews.com/2013/09/us-airways-american-airlines-want-to-know-whom-the-department-of-justice-talked-to.html/


APFA Hotline Update (More Motions Filed in Antitrust Case): September 24, 2013

On last Friday's hotline, we reported the filing of AA and US Airways' motion to compel the DOJ to comply with requests for discovery. In a civil case such as this antitrust litigation, the parties have the right to ask the opposing side for information regarding the claims and defenses that have been asserted in the lawsuit. This process is referred to as discovery and most typically takes the form of requests for information and documents.

Today, the airlines filed a second motion to compel; this time asking the court to require the DOJ to identify the third parties it interviewed prior to filing its lawsuit and to describe the content of those interviews. AA and US Airways argue the following:

"In preparing their case, Plaintiffs had the advantage of months of pre-filing investigation, including conducting numerous third-party interviews. Having chosen to file suit, Plaintiffs cannot now withhold the revenant facts they learned from those third-parties. Absent an order directing Plaintiffs to answer [this Interrogatory] in full, those facts - some of which may undercut the Plaintiff's claims and support the merger - will remain locked away in the Plaintiffs' files, a result directly at odds with the fundamental purpose of civil discovery."

Earlier this month the court appointed magistrate Richard A. Levie as Special Master to resolve discovery disputes such as these. It is expected that he will rule on the motions very shortly.

Finally, yesterday, AMR and US Airways agreed to extend the date on which either AMR or US Airways may terminate their Merger Agreement. The original date was December 17, 2013.

It will now be either January 18, 2014, or (if the Court enters an order on or before January 17, 2014 in favor of American and US Airways) on the 15th day following the entry of such order. For example, if a favorable ruling is issued on January 10, the deadline would be January 25.

In the event of an unfavorable ruling by the Court, AMR or US Airways may terminate the merger agreement five days after the Court enters a final, but appealable, order permanently enjoining the merger.

AmericanAirlines + US Airways
"MERGE!"

Leslie Mayo
APFA National Communications Coordinator


Leonidas Update: September 24, 2013

September has been an extremely busy month for the West Pilots and our attorneys. Written discovery was issued by both our side and USAPA, resulting in the production of nearly 400,000 pages of documents. Fifteen West pilots were deposed for up to 4 hours each, with USAPA asking questions focused on opposing class certification, Leonidas finances and SLI fairness. Last week, our attorneys deposed 10 USAPA officers, BPR representatives and committee members over 4 days in Charlotte. The depositions in Charlotte were quite fruitful providing additional evidence to make our case. There is currently a protective order in place that prevents the release of certain documents and transcripts to the public.

By now, most know that the Addington III trial date was moved to October 22 to meet the needs of the court (Doc 174). There have also been a number of legal filings in recent weeks, which are discussed in detail below. Of most importance is Judge Silver’s Order on September 18, 2013, (Doc 194), which resolved the following issues pending before the Court: (1) class certification; (2) the Company’s Motion to Intervene; (3) two motions to quash subpoenas issued to Leonidas relating to USAPA’s request to obtain Leonidas’ financial records; and (4) USAPA’s Motion for Reconsideration.

Class Certification

In a prior order (Doc 122), “the Court instructed USAPA that if it planned on opposing certification in this case, it should present ‘substantially better arguments’ than what it presented in the past.” In Judge Silver’s words, “Unfortunately, USAPA did not listen.” (Doc 194).

As many of you are aware, USAPA has advanced the argument in this litigation that the West Pilots waived their right to pursue the Nicolau award because 98% of West Pilots voted in favor of the MOU. This was one of the arguments that USAPA advanced in opposing class certification. Again, in Judge Silver’s own words: “This argument cannot be taken seriously.” (Doc 194) (emphasis added). With respect to this argument, Judge Silver stated:

During the vote on the MOU, USAPA repeatedly assured all of its members that the vote would have no bearing on adoption of the Nicolau Award. In USAPA’s own words, “no East pilot should vote against the MOU because they fear that ratifying the MOU will implement the Nicolau Award, and no West Pilot should vote for the MOU because they believe the MOU will implement the Nicolau Award.” (Doc 136). In light of this and similar statements during the ratification vote, USAPA’s current position that the vote was a clear statement by the majority of the West Pilots that they are no longer interested in pursuing the Nicolau Award is very close to frivolous. (emphasis added).

In her order, Judge Silver certified the class of West Pilots and appointed Marty, Andy and Jennifer as class counsel. Judge Silver also found that notice was not required given the circumstances of this case and that our attorneys had been certified twice before.

Motion to Intervene

In its pleadings, the Company has indicated that it will only way in on two issues, the ripeness of the West Pilots’ claims against USAPA and the West Pilots’ right to participate in any McCaskill-Bond arbitration. (Doc 128) The West Pilots joined the Company’s Motion to Intervene, which of course USAPA tried to oppose. Last week, the Court once again disagreed with USAPA and granted the Company’s Motion to Intervene.

Leonidas Subpoenas

Over the past several weeks, USAPA has issued two subpoenas to Leonidas, seeking documents and testimony regarding, among other things, Leonidas’ financial records, including information regarding individual donors. Leonidas’ opposed this effort and last week the Court found that “USAPA has not been able to establish the relevance of the information sought by either subpoena.” (Doc 194). The effect of quashing these subpoenas is that Leonidas will not be required to respond to the subpoenas issued by USAPA.

Motion for Reconsideration

On September 5, 2013, USAPA filed a Motion for Reconsideration, asking Judge Silver to reconsider her prior orders regarding ripeness and to dismiss this litigation. This pleading was improper for a number of reasons, including that it was filed well past the deadline for doing so. However, under the local rules of procedure, the West Pilots could not respond to this motion until Judge Silver ordered them to do so. Judge Silver, however, apparently did not believe the Motion for Reconsideration warranted a response by the West Pilots and denied the motion. (Doc 194)

From the order that came out last week, it appears that USAPA wasted countless hours of their attorney’s time and our attorney’s time pursing legal strategies that were, as the Judge stated “very close to frivolous.” It is unfortunate that USAPA continues to pursue these strategies and attempt, yet again, to delay the resolution of this matter.

USAPA’s Ninth Circuit Filings

In addition to the above, USAPA also filed on September 13, 2013, a Petition for Writ of Mandamus with the Ninth Circuit Court of Appeals, Ninth Circuit Case No. 13-73215, Doc. 1 and a Motion to Stay, Doc. 3, essentially asking that the Court of Appeals direct Judge Silver to reverse her prior rulings on ripeness and stay the case until the Ninth Circuit could hear the issue.

The first filing, the Writ of Mandamus, is a request for a higher court to tell a lower court that they must, or must not, act. These types of writs are exceedingly rare in modern jurisprudence, mostly because for a writ to issue there must be a compelling reason not to wait until an appeal from a final judgment. Here, USAPA is arguing that Judge Silver erred in her determination that the case was ripe. USAPA made this argument to Judge Silver twice and she has disagreed both times. We at Leonidas don’t see how USAPA’s Writ has any hope of success, principally because the avenue for appeal after a final judgment is available to USAPA. Hence, there is no compelling need for the Ninth to issue the Writ. Similar to the Motion for Reconsideration that was summarily denied by Judge Silver, our attorneys believe that the Writ of Mandamus has no merit; however, we cannot respond to it until directed to do so by the Ninth Circuit. To date, we have received no such direction but are prepared to file a response should the Ninth Circuit direct us to do so.

The second filing was USAPA’s request that the Ninth Circuit stay the trial in the District Court. Within hours, Dr. Jacob drafted and filed a brief in opposition to USAPA’s motion with the Ninth Circuit (Dkt Entry 5). Procedurally, USAPA’s motion is fatally defective because according to the plain language of Rule 8 of the Federal Rules of Civil Procedure (FRCP), such a motion must first be filed at the District Court. Here, it was not. Also, Dr. Jacob succinctly identified the true motives of USAPA:

“In this latest effort to delay justice, USAPA moved for an “emergency” order to stay the District Court proceedings. USAPA did so on the eve of when its officers will have to explain their actions at depositions. If USAPA was sincere in its desire to conserve costs, it would not have delayed its motion, as it did, until after it subjected the class representatives to fifteen depositions that had little to no bearing on the merits of the claims. The timing of USAPA’s motion, therefore, is telling.”
Again, our attorneys believe that this latest stunt by USAPA is procedurally and factually improper and that it will be ignored or denied by the Ninth Circuit.

AMR Corporation’s Motion for Leave to Participate

On September 20, 2013, AMR Corporation filed a Motion for Leave to Participate as Amicus Curiae. This Motion can be found here: (Doc 196). Our attorneys do not intend to oppose the Motion.

Scheduling Order

After issuing her order taking care of several outstanding issues, Judge Silver entered the First Amended Scheduling Order agreed to by the parties. [Doc 195]. This document will govern the schedule going forward for the next several of weeks as we prepare for trial. It should be noted that if USAPA attempts to file a motion for summary judgment to further delay this matter, they are not permitted under the scheduling order to request a continuance of the trial date based on any motion. Our attorneys’ will be working hard the next few weeks to finalize our sections of the Joint Proposed Pretrial Order, due on October 9, 2013.

Where are we now?

If anything, the filings by USAPA over the past few weeks are proof to the world that USAPA’s primary strategy is still delay, in a hope to outspend the West and to prevent an adjudication of the DFR claim. This strategy is quite a bit different than the strategy sold to the East pilots back in April of 2008. Remember the confident pronouncements during the USAPA campaign that a DOH contract would be had within 90 days of USAPA’s certification? Fast forward five and a half years and look what USAPA has done to this pilot group, both East and West: cost it over $650 million in wages that it will never get back from the Company. For the sake of all US Airways pilots as we move towards the merger with American, we hope that this will be the end to this saga and that all of us can move forward with better wages.

The West never asked for this fight, but we are where we are. Now, the only thing the West can do is to continue to defend itself against a union whose sole purpose is to advance the seniority of certain East pilots at the expense of the West pilots. Your financial contributions are all that stand between your seniority rights and USAPA’s DOH. Our second trial is one month away and as anyone can surmise, we are in the most expensive part of any litigation which is trial preparation. In the last three weeks we have been forced to endure fifteen absolutely pointless depositions lasting four hours apiece. Present in each of those depositions were Marty, Andy or Jennifer. Additionally, USAPA has literally dumped tens of thousands of documents on us as a part of a discovery strategy: dump at the last minute thousands of documents in the hope that the West Pilots would not review them. To USAPA’s surprise and shock, West pilots painstakingly sifted through every one of USAPA’s documents, free of charge of course. We do this because we have to. It’s the right thing to do. If we don’t contribute with our voluntary efforts, then there is nothing to stop USAPA from stealing our seniority, and severely damaging Fair Representation for all US Airways pilots.

We have set up a special website called “ The Push For Justice” and its purpose is to meet our funding requirement for the trial and post-trial phases. We ask that each captain subscribe for $100 a month and each first officer $50 a month until our seniority rights are secured. Fellow pilots, this is it: fund now or forever hold your peace.

To all of the contributors to the West Pilot legal effort: thank you for getting us this far. Have a great week.