UAL Confirms Hiring Consultant Known for Bankruptcy Work

UAL777flyer

Veteran
Aug 20, 2002
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It's always bad PR when news like this hits the wires, but for a company in UA's financial condition, it shouldn't be that surprising to anyone. The threat of a Ch. 11 filing is very real, so all ducks are being aligned should that threat become a reality.
 

magsau

Veteran
Aug 20, 2002
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Not sure this is truly newsworthy. Anything uncovered by the USA Today is not really news.(not too many woodward and bernstien's on the staff there) This is something that any company in UAL's position would be doing. UAL is looking at all options to right itself. To BK or not BK is probably the biggest question at EXO. Whatever the outcome I try to remain optimistic about the future of UAL.
 

avek00

Senior
Aug 28, 2002
391
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It's definitely not good news. The hiring of Rothschild for financial advice is often one of the last steps taken before a Chapter 11 filing...
 

MrMarky

Advanced
It seems to me that UAL would have been much better off to have secured the services of the legal team that advised AA during the TWA acquisition. Don't recall the name but they were the best.

These were the very clever attorneys who came up with the plan of forcing TWA to file BK. Not only that, they used the obscure Chapter 11 section 363, rather than the more common section 365.

This provided for the cancellation of Carl Icahn's Karabu Agreement, despite the fact the agreement had specific language in it that prohibited it from being voided by a BK.

They were also able to force the hand of all of TWA's labor groups and make them give up their scope and successorship clauses under great duress. The TWA pilots' lawsuit against the ALPA national union now alleges that ALPA was operating secretly in collusion with the AA pilot groups' APA against the TWA pilot group, in an attempt to win the AA pilots representation. Dispicable if true.

The handy work of AA's legal team allowed AA to pick up TWA for pennies on the dollar while shedding any assets, contracts or liabilities (and ultimately employees) they didn't want. All the while this was accomplished with barriers that effectively blocked any efforts by others to bid competitively against AA for TWA.

No question in my mind that this legal team could craft a bankruptcy for UAL which would have them come out smelling like a rose, at the expense of their employees and creditors and who knows who else. All of this would be unilaterally imposed of course.

I have no idea what Rothschilds did for TWA. Maybe they were the ones who told TWA how to make themselves look broke, so that they and AA could use the failed company defense to get the deal through DOT, DOJ and Congress in a hurry, all with the empty promise of preserving the TWA jobs which have become nothing more than a cushion to protect AA jobs during the furloughs.

Since the UAL management team did not see fit to obtain the services of this very talented legal team that helped AA, I would strongly suggest that UAL's unions track them down and hire them. Rothschild's appeared to be no match for them from what I've seen.
 

UAL777flyer

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Aug 20, 2002
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The TWA bankruptcy that ultimately led to AA swallowing them would be a whole different scenario than if UA declares bankruptcy. TWA had no tangible assets left. They were fully leveraged. And I don't mean to disparage what TWA was, but their network was nothing compared to what UA has. So the value for UA is greater. UA has tangible, unencumbered assets. In fact, you can make the argument that the only real reason UA would declare bankruptcy is because they're staring at a collection of VERY large debt payments coming due beginning in November and they cannot refinance that debt at anywhere close to attractive rates.

So while I fully understand your point about the whole TWA/AA scenario, I just don't think it's an accurate comparison to what UA might encounter in Ch.11. Of course, if we throw in the much-talked about UA/US-merger-via-Chapter-11 scenario that gets thrown around on this board at times, then the two situations start to look a lot more similar. But I don't think that is what's going on.
 

MrMarky

Advanced
Hi John,

I'm not trying to compare the TWA situation to the UAL situation. I'm just talking about who the most effective law firm seems to be and I was citing examples of what the AA firm did during the TWA takeover.

Seems to me the law firm AA used was one slick outfit.

Marky
 

UAL777flyer

Veteran
Aug 20, 2002
730
0
MrMarky,

My apologies for miscontruing your remarks. Yes, your comments are correct. Say what you want about AA, but those guys know how to get a deal done in their favor, even if it means bringing out the heavy artillery on occasion.
 
Sep 5, 2002
12
0
[blockquote]
----------------
On 9/10/2002 7:26:32 PM MrMarky wrote:

>Hi John,

>I'm not trying to compare the TWA situation to the UAL situation. I'm just >talking about who the most effective law firm seems to be and I was citing >examples of what the AA firm did during the TWA takeover.

>Seems to me the law firm AA used was one slick outfit.

Marky
----------------
[/blockquote]
I'm sure AA used the same law firm when they sued the pilots union back in 99 from the sickout. The APA lawyers looked pretty foolish
 

avek00

Senior
Aug 28, 2002
391
0
I would argue that TWA had the sharper legal/financial team. TWA's people were able to convince the BK Court that TWA was in far worse condition than it really was, and successfully dodged viable alternatives to the AMR purchase both before and after the Chapter 11 filing.
 

Rhino

Senior
Aug 20, 2002
308
0
[I would argue that TWA had the sharper legal/financial team. TWA's people were able to convince the BK Court that TWA was in far worse condition than it really was]

Maybe you would argue that, but it would still be utter nonsense. You never answered the earlier question as to the 'viable' biz plan the IAM proposed. No one could. There wasn't one.
 

Rhino

Senior
Aug 20, 2002
308
0
Bringing this thread back up, so that Avek won't miss it. You don't have to respond to the TWA question, just say that you choose not to. Your oft-stated position re the TWA BK has never been substantiated.
 

B747-437B

Newbie
Aug 29, 2002
5
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www.usaviation.com
The AMR legal team on the TWA bankruptcy was led by Alan Miller of Weil, Gotschal and Manges. The TWA legal team was led by Jamie Spreyregen of Kirkland and Ellis. If I recall right from earlier media reports, UAL has already consulted with (not sure if they retained him) Spreyregen.

As for the IAM plan for TWA, avek doesn't know the details of it, and those who do are bound by NCNDA's which last until its no longer relevant, so why bother discussing this subject to death?
 
Aug 19, 2002
1,062
737
The JFK
www.usaviation.com
[blockquote]
----------------
B747-437B wrote:

And those who do are bound by NCNDA's which last until its no longer relevant, so why bother discussing this subject to death?


----------------
[/blockquote]


So that's why Vitale fell off the face of the earth! He's been muzzled by NDA's! Or was he just not too keen on eating crow after all of those grand statements he made on several different boards?

You guys were so cute, posting your Teasers all over Plane Business and Yahoo, whipping the TWA faithful into a frenzy with a tasty morsel of info here and there, then hiding behind the almighty Non Disclosure Agreements when pressed on the issue.


Your man Levine was tarred and feathered and ultimately driven from Plane Business because he loved dropping a big hint and then taking a pass on answering due to the almighty NDA tying his hands.


You know why JAG and their bid really failed? AMEX declined the $842 million dollar charge on Big Al's card.


Are you going to reform JAG and ride in to Save UAL? Oh wait, you guys don't have a UAL fetish do you? US Airways perhaps? Or are they not worthy of the efforts of the Message Board Messiah and The Air India 747?[img src='http://www.usaviation.com/idealbb/images/smilies/9.gif']


Don't bother to answer Sean, I know those NDA's are tying your hands.[img src='http://www.usaviation.com/idealbb/images/smilies/2.gif'] [img src='http://www.usaviation.com/idealbb/images/smilies/9.gif']
 

avek00

Senior
Aug 28, 2002
391
0
[blockquote]
On 9/14/2002 7:18:19 AM JFK Fleet Service wrote:

Are you going to reform JAG and ride in to "Save" UAL? Oh wait, you guys don't have a UAL fetish do you? US Airways perhaps?[/blockquote]

JAG has decided to wait until next year when AMR's assets are up for sale and get TWA that way.