USairways signs NDA with AA

[USA320Pilot]

US Airways: No non-disclosure agreement with AA

http://travel.usatod...eement/832751/1

 

[jimntx]

Well, not quite. All AA needs to do is get a sympathetic federal judge to deem such actions as illegal job actions, impose and injunction and threaten to fine APA out of business. It happened on AA property once. It happened at LCC property much more recently where the federal judge initially virtually enjoined the pilots from writing up maintenance discrepancies. (I wish USAPA had taken out a US Today page on that judge's decision.)

True, but I imagine that the APA would call in the FAA as expert witnesses to the state of maintenance at AA. They (or LCC pilots) didn't have that in the past. $162 million in fines is not something even the most pro-company Federal judge could ignore. And, if he did, the FAA could always come back like they did with the S80 wiring harnesses and order the a/c grounded until repaired.

When the FAA can point to such things as 15,000 passenger-laden flights made with unrepaired 757s, it can't be explained away as an inadvertent oversight. And, they have examples from every type a/c in the AA fleet--including 777s.

 

[FWAAA]

The FAA did not impose $162 million in fines because they were bored that day, and wanted to do something fun and exciting.

This part is correct. The FAA has not imposed $162 million in fines upon AA. The FAA filed proofs of claim in the aggregate amount of $162 million to perfect its position before the deadline for claims passed.

True, but I imagine that the APA would call in the FAA as expert witnesses to the state of maintenance at AA. They (or LCC pilots) didn't have that in the past. $162 million in fines is not something even the most pro-company Federal judge could ignore. And, if he did, the FAA could always come back like they did with the S80 wiring harnesses and order the a/c grounded until repaired.

As discussed above, the FAA has not fined AA $162 million.

 

[wings396]

Looks like it has been signed by both parties as of today.
Parker sent out a company newsletter a short time ago.

 

[etops1]

Dear Fellow Employees:
Today we announced that US Airways has entered into a Non-Disclosure Agreement (NDA) with American Airlines’ parent company, under which both companies have agreed to exchange certain confidential information and to work in good faith to evaluate a potential combination. We are pleased to be working directly with American to study a potential merger and we consider this very good news. It does not mean we are merging – it simply means we have agreed to work together to discuss and analyze a potential merger.
A Non-Disclosure Agreement is pretty much what it sounds like. We, along with American, have agreed to not publicly disclose anything about the discussions or analysis as we move forward because we don’t believe that would be productive. We have also agreed not to discuss the work that is being done to analyze a potential combination with anyone not covered by the NDA. This agreement will likely remain in place until either a deal has been signed or we have determined this process will not result in a transaction.
As a result, we will not be able to be as open and candid about the discussions with American as we usually are about issues that are important to all of us. We will still be very communicative, of course, about all other aspects of our airline, and our Communications Team will continue their great work through About US, US Daily, Wings, State of the Airline webcasts, Crew News webcasts, etc.
I trust you recognize the importance of signing this NDA and we appreciate your understanding. While we may not be providing regular updates on this process, rest assured your management team is working diligently and aggressively to do what is best for US Airways and our hard- working team members. I will let you know more as soon we are able.
In the meantime, please keep up the great work. You all are doing a wonderful job of taking care of our customers and running a great airline. The results are remarkable. Thank you so much for all you do.
Sincerely, Doug

 

[BoeingBoy]

This part is correct. The FAA has not imposed $162 million in fines upon AA. The FAA filed proofs of claim in the aggregate amount of $162 million to perfect its position before the deadline for claims passed.

As discussed above, the FAA has not fined AA $162 million.

A difference without a distinction - the claim is to cover what would normally be a fine but instead lead but because pre-bankruptcy debts can't be collected so they result in a claim. The FAA just didn't decide to file a claim one day for no reason. I'd be a little surprised if it's not paid eventually since government agencies normally get their money even if it's incurred pre-bankruptcy. Payroll/income taxes, PFC's, landing fees, etc all normally end up being paid.

Jim

 

[Jester]

I'd be a little surprised if it's not paid eventually since government agencies normally get their money even if it's incurred pre-bankruptcy. Payroll/income taxes, PFC's, landing fees, etc all normally end up being paid.

I have read articles where the government went after the CEOs personally for money owned to the Federal government, even after the corporation filed for bankruptcy liquidation...sometimes in the millions of dollars, and it wasn't even a criminal act or regulatory violation! If it is money owed to the Federal government by a decent sized corporation, there are few means to escape the long arm of Uncle Sam.

 

[jimntx]

Well, that is in cases of possible malfeasance--such as, the corporation owes the Feds $50million in back taxes, but the corporation files for liquidation shortly after awarding the CEO a huge bonus. The Feds are just saying "Yes, we'll take that $25 million as a down payment on the debt."

 

[Jester]

Well, that is in cases of possible malfeasance--such as, the corporation owes the Feds $50million in back taxes, but the corporation files for liquidation shortly after awarding the CEO a huge bonus. The Feds are just saying "Yes, we'll take that $25 million as a down payment on the debt."

Here's an excellent recent example from the U.S. Court of Appeals, 5th Circuit, for a former airline CEO being held personally liable for over $11.5 million in excise taxes before the organization liquidated... http://caselaw.findl...it/1574638.html

In part, the ruling reads:

"Michael Conway ('Conway') appeals from the district court's summary judgment determination that, pursuant to 26 U.S.C. § 6672, he is personally liable for excise taxes that National Airlines ('National') collected from its passengers but failed to pay over to the United States during his tenure as National's CEO. Because we hold that the district court properly found that Conway was a 'responsible person' and that his failure to pay taxes was willful, as defined by this circuit's precedents, we AFFIRM the judgment of the district court."

Yeah, the same Michael Conway who once lead America West Airlines... bankruptcy won't wash that debt away, even if it was not criminal in nature.

 

[FWAAA]

A difference without a distinction - the claim is to cover what would normally be a fine but instead lead but because pre-bankruptcy debts can't be collected so they result in a claim.

My post was in response to jimntx who posted multiple times in this thread that the FAA "had fined AA $162 million," and that declaration is, IMMO, a bit premature. It's actually false. No fines have yet been imposed.

I certainly agree that the claim was filed to protect the FAA's ability to collect something when it eventually completes its investigations and imposes its proposed fines, but in reality, those proposed fines aren't going to equal $162 million. That figure is merely the aggregate of the maximum possible fine for every violation asserted, and airlines almost never pay the maximum fine. For argument's sake, perhaps the FAA will propose a fine of $16.2 million which AA will argue down to $8.1 million. Now, all of a sudden, the $162 million attention-grabbing figure is down to 5% of that amount. And, of course, the FAA will get a fraction of that $8 million (since unsecured claims are rarely paid 100%) and that fraction will probably be satisfied in new stock. But the FAA certainly attracted a lot of attention with the $162 million figure.

The FAA just didn't decide to file a claim one day for no reason. I'd be a little surprised if it's not paid eventually since government agencies normally get their money even if it's incurred pre-bankruptcy. Payroll/income taxes, PFC's, landing fees, etc all normally end up being paid.

Yes, taxes, (excise and trust fund), are afforded statutory priority under Section 507 of the Bankruptcy Code and thus are paid right after the lawyers and the trustee. FAA regulatory fines aren't in the same league, and would thus be unsecured claims (hence the filing of proof of claim by the FAA in the maximum aggregate amount).