Did Mesa get the votes?

[Broke in CVG]

So under the new Mesa contract, you guys get a 1,100% raise too, huh?

JO pays the bonds with equity (or phony equity) and then Bankruptcy there you go. Equity holders are the LAST to get their $.

I can't believe the pilots at Mesa were so stupid to fall for JO's master plan to BK and walk away. Well, actually yes I can.

Mesa sucks!

 

[V-1]

I suspect this is just a strategic move to make it less attractive for bondholders to demand payment in 2009. The conversation goes something like this:

"We want our money back."

"Okay, but all we have is a billion shares of stock to give you."

"These things aren't worth anything to us...you're likely to file bankruptcy anyway."

"So what's your point anyway?"

"Ahhh, screw it. We'll wait another twenty years for our money."

On the other hand, how do you give 90% of the shares outstanding in common stock without losing control of the company?

There may be potential for yet another court proceeding against Mesa as bondholders file suit to recover payment in cash or shares that control the company in order to effect a takeover and subsequent liquidation of assets...assuming Mesa has any that aren't already encumbered.

 

[Tarzan]

All this move does is delay the inevitable. Mesa hasn't been paying their bills for parts, etc. Eventually, someone is going to tell MAG to take a hike. Once this starts, things will quickly spiral down the drain. MAG does not have either the assets or cash to survive this thing.

 

[dooork]

The problem is that you can't just print money like this. Issuing more shares just dilutes the stock price while at the same time reallocates who owns that equity. So what JO is essentially doing is stealing money from his shareholders to pay off the company debt. Just like the Mesa pilots wouldn't stand up to JO neither will the shareholders.

JO will walk out of this mess both a hero and a king in the buisness world. Meanwhile everyone who makes the company what it is gets screwed by their own cowardly refusal to stand up for themselves.

Sounds a little better than BK...like so many other airlines that completely screwed their shareholders and vendors!

 

[flyboyike]

MAG does not have either the assets or cash to survive this thing.

I've hearing that for years.

 

[Tarzan]

I've hearing that for years.

MAG hasn't seen the credit market freeze during it's existence either.

 

[flyboyike]

MAG hasn't seen the credit market freeze during it's existence either.

Perhaps.