AA Ch 11 coming soon

[satpak77]

AMR stock is at 5 dollars and change. They are still on the game.

what do you mean ?

 

[LeeRoyJenkins]

How can you declare bankruptcy with 6 billion cash on hand

Sent from my DROIDX using Tapatalk

It will probably cost AMR about $2-3 Billion in cash to finance the BK if they do not want to go the DIP BK route.

That being said I think AMR will file for BK within 18 months. I hope the best for their employees but fear the worst.

 

[nwa747]

Can retiree's elect a cash out option vs the pension? I was just thinking, and I may be way off, but if they file BK would their pension get passed on to the PBGC? If that's the case you could see retirements accelerate.

 

[XTW]

Can retiree's elect a cash out option vs the pension? I was just thinking, and I may be way off, but if they file BK would their pension get passed on to the PBGC? If that's the case you could see retirements accelerate.

Talk to the APA crowd. They think that their A-plan is iron-clad and cannot be touched in a Ch.11 situation. It would be very interesting.

AA retirees can take a lump-sum or an annuity at retirement.

X

 

[nwa747]

The lump some may look appealing right now if you think they are heading to court. Why would you screw your retirement over an extra year or two of flying. I bet you will see many walking away soon. Taking a lump some of 1 million will go much further then some crapy government backed pension bailout.

 

[Taco Rocket]

"cannot be touched in a Ch.11 situation. "
X

hmmmm where have I heard this before?

 

[ex j-41]

I believe you just have to show that AA's operation is unsustainable which is pretty easy to do with the current cash burn.

Labor costs are the highest among the legacy carriers and all three labor groups are ready to strike. Eagle's operating costs are way above those of other feeder ops and their virtually worthless fleet of ERJ's (to which AMR holds the mortgage) cannot be sold for enough to buy lunch for the BOD.

All it takes is a phone call from Arpey to the NMB to "loose the hounds!" and a two day strike will force AMR's hand.

You can't use Ch.11 to dump pension plans but as the only remaining pax airline with a defined benefit pension, it wouldn't be too hard to get the judge to axe that from the new 1113-implemented contract. A frozen pension plan or one managed by the PBGC is far better than a growing DB plan with several thousand soon-to-retire pilots walking out the door with a couple million bucks.

I've felt for a long time that a Ch.11 was the smart thing to do from a management pov. Now, for current management to do it as a prepack in order to keep feasting on the carcass for a few more years is the trick.

TC

Yes Chapter 11. Ditch the retirements and then merge with......
A merger needs too things. High gas prices and BK.

 

[General Lee]

hmmmm where have I heard this before?

No, after the DL BK there were some laws and protections created to stop that from happening again. It is a lot tougher now to dump a pension.


Bye Bye---General Lee