US Air to Emerge From Bankruptcy
#1
Original Poster
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US Air to Emerge From Bankruptcy
Possibly a silver lining in a very cloudy environment? Could also mean that airlines who do not follow suit of bankruptcy stand less of a chance of overall survival, ie. AA? Still think also that UA may not emerge.
http://story.news.yahoo.com/news?tmp...s_bankruptcy_7
http://story.news.yahoo.com/news?tmp...s_bankruptcy_7
#2
Join Date: Sep 2000
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Well we see that the motivating factor to come out so soon was the federal bailout loan that they would not qualify for if they were still in bankruptcy.
I agree that I still do not see UA getting out successfully, just a hunch.
[This message has been edited by quinella66 (edited 03-31-2003).]
I agree that I still do not see UA getting out successfully, just a hunch.
[This message has been edited by quinella66 (edited 03-31-2003).]
#4
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Well the "deadline" AA imposed for concessions or bankruptcy has just passed. Evidently the pilots union accepted the requested cuts, and I believe many of the other employees have also.
Still, if UA can make it, I imagine AA can. AA seems to have a better grasp on the realities of the situation then UA does.
Still, if UA can make it, I imagine AA can. AA seems to have a better grasp on the realities of the situation then UA does.
#6
Join Date: Sep 2002
Location: mystic island, nj, USA
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<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by mauld:
The question now is, is US Air worth a flyer at 12 cents???</font>
The question now is, is US Air worth a flyer at 12 cents???</font>
NO NO NO! The stock becomes worthless the second they emerge from BK, Don't do it
#7
Join Date: Jul 2001
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No, there will be some issuing of new stock eventually or something. The Retirement Systems of Alabama owns a controlling stake in the reorganized US.
#9
Join Date: Jul 2002
Location: Houston, TX
Posts: 453
why does it become worthless when they emerge from BK? Thanks!!
<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by PineyBob:
NO NO NO! The stock becomes worthless the second they emerge from BK, Don't do it
</font>
NO NO NO! The stock becomes worthless the second they emerge from BK, Don't do it
</font>
#10
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<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Andy100:
why does it become worthless when they emerge from BK? Thanks!!
</font>
why does it become worthless when they emerge from BK? Thanks!!
</font>
#11
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Good for US Air. Have no idea why this thread really belongs in Buzz, but glad I read it it, as never visit US Air board.
A week back I would have said the chances of United still flying come December was maybe 15%. Randy was advising folks not to panic and cash miles, and that looked to me like a pretty risky call.
Now I would rate it 70%. Randy guessed pretty right it seems.
The pilots union just agreeing to a 30-35% pay cut, and other serious concessions United wanted was the turning point IMO. Still to be voted on but pilot boards I read say it is a forgone conclusion. And the other unions will follow on this one.
The AA unions do not want to see THAT big a salary dip so IMO they quite sensibly are agreeing to smaller reductions NOW before a BK judge forces it on them if Chapter 11 loomed large, which it was.
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~ Glen ~
Come visit HERE the most ** FRIENDLY FORUM ** on FlyerTalk. No flame wars, no personal abuse, no substance abuse. Not much of anything really!
A week back I would have said the chances of United still flying come December was maybe 15%. Randy was advising folks not to panic and cash miles, and that looked to me like a pretty risky call.
Now I would rate it 70%. Randy guessed pretty right it seems.
The pilots union just agreeing to a 30-35% pay cut, and other serious concessions United wanted was the turning point IMO. Still to be voted on but pilot boards I read say it is a forgone conclusion. And the other unions will follow on this one.
The AA unions do not want to see THAT big a salary dip so IMO they quite sensibly are agreeing to smaller reductions NOW before a BK judge forces it on them if Chapter 11 loomed large, which it was.
------------------
~ Glen ~
Come visit HERE the most ** FRIENDLY FORUM ** on FlyerTalk. No flame wars, no personal abuse, no substance abuse. Not much of anything really!
#12
Join Date: Jan 2002
Location: atlanta, GA
Posts: 2,040
It becomes worthless because stockholders get paid after creditors, and if you are in BR then there is not enough money to pay creditors let alone stockholders. In most cases, the creditors take the equity as partial payment, although in a few cases the original shareholders keep something or get something -- often warrants.
#14
Join Date: Dec 2000
Location: Brooklyn, NY, US
Posts: 2,311
From the emergence FAQ:
What happens to the stock of previous shareholders?
Consistent with the plan of reorganization confirmed by the U.S. Bankruptcy Court on March 18, 2003, the company's prior common stock has been cancelled.
Who gets stock in the newly reorganized company and in what proportions?
New common stock will be issued in two classes. There are 51.1 million shares of Class A common stock and 5.0 million shares of Class B common stock. The allocation is as follows:
RSA, which is investing $240 million in US Airways will hold 36.6 percent (on a fully-diluted basis) of the Class A shares and all of the Class B shares
Members of the Air Line Pilots Association: 19.3 percent of the Class A shares
Other employees: 10.8 percent of the Class A shares
Unsecured Creditors: 10.5 percent of the Class A shares
The ATSB: 10.0 percent of the Class A shares
Management: 7.8 percent of the Class A shares
General Electric: 5.0 percent of the Class A shares
How will the stock be listed and traded?
US Airways will be listed on a public stock exchange, but those details have not been disclosed, pending the completion of listing requirements and the distribution of unrestricted stock.
What will unsecured creditors receive as payment for their claims?
Holders of allowed general unsecured claims (including vendors and bondholders) will receive Class A common stock and Class A-1 warrants in the reorganized company, but the amount of stock for each creditor, and the overall percentage of repayment for each claim is still to be determined. It is estimated that the recovery for general unsecured creditors will be from 1.2 percent to 1.8 percent of the allowed claim. Holders of allowed secured and priority claims are expected to receive the full amount of their claims.
http://www.usairways.com/about/emergence/faq.htm
What happens to the stock of previous shareholders?
Consistent with the plan of reorganization confirmed by the U.S. Bankruptcy Court on March 18, 2003, the company's prior common stock has been cancelled.
Who gets stock in the newly reorganized company and in what proportions?
New common stock will be issued in two classes. There are 51.1 million shares of Class A common stock and 5.0 million shares of Class B common stock. The allocation is as follows:
RSA, which is investing $240 million in US Airways will hold 36.6 percent (on a fully-diluted basis) of the Class A shares and all of the Class B shares
Members of the Air Line Pilots Association: 19.3 percent of the Class A shares
Other employees: 10.8 percent of the Class A shares
Unsecured Creditors: 10.5 percent of the Class A shares
The ATSB: 10.0 percent of the Class A shares
Management: 7.8 percent of the Class A shares
General Electric: 5.0 percent of the Class A shares
How will the stock be listed and traded?
US Airways will be listed on a public stock exchange, but those details have not been disclosed, pending the completion of listing requirements and the distribution of unrestricted stock.
What will unsecured creditors receive as payment for their claims?
Holders of allowed general unsecured claims (including vendors and bondholders) will receive Class A common stock and Class A-1 warrants in the reorganized company, but the amount of stock for each creditor, and the overall percentage of repayment for each claim is still to be determined. It is estimated that the recovery for general unsecured creditors will be from 1.2 percent to 1.8 percent of the allowed claim. Holders of allowed secured and priority claims are expected to receive the full amount of their claims.
http://www.usairways.com/about/emergence/faq.htm