UAL chapter 11

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There seems to be conjecture that the 16 million dollar a day loss reported from UAL is a tactic to influence labor negotiations. Candidly, folks who believe companies can make ficticious reports simply do not understand the law.

Publicly traded companies have a fiduciary obligation to shareholders. Violation of the reporting standards can not only result in civil litigation, but also criminal prosecution.

There is precedent for Chapter 11 restructuring and the move makes more sense while there are still assets to reorganize the company with.

Many of you read that Avolar is dead without outside investment - this only makes sense.

The bankruptcy and restructuring of UAL also makes sense, how long can a company afford to lose 2 billion a quarter - after a while it sue adds up...

 

[flint4xx]

Their CEO was quoted as saying that unless there is an unforseeable change in the industry soon, his company will be faced with Ch 11 reorganization in the near future.

I got that from Yahoo Aviation news. You can't bleed that much cash forever. The proverbial dust hasn't settled yet from 9-11. Just 'cause they reorganize under ch 11 doesn't mean they will go out of business. It just protects them for awhile.

 

[sewertube]

My 2 cents

Not to fuel the rumors more, but I heard it like Taco explained it, if those things happen then chapter 11 will happen. Especially if and when the mechanics raise goes through, that will push them over the edge. The reason for chapter 11 will be to get "emergency action" on the current contracts. Including the ridiculous pilot wages they signed not too long ago. That is definitely a gaping wound. This is just how it has been explained to me, and probably mostly more heresay. Personally I think bankruptcy couldn't happen to a better airline....

 

[Chocks]

Grow up!!

"Personally I think bankruptcy couldn't happen to a better airline...." Grow up. I can't believe you would be happy about the prospect over ten THOUSAND pilots out of work. These are over 10 THOUSAND of pilots with families, kids, dogs, etc. Wow. "Ridiculous Wages" Why SHOULDN'T the person DIRECTLY responsible for the LIVES of over 200 people (777 Captain) make the same as a lawyer or doctor? I can't believe you are in this line of work - obviously you don't have the integrity, mental capacity and maturity to be responsible for the well being of others. Go sell cars or something.

discusted.......Chocks

 

[kilomike]

Well said, Chocks!!

 

[EAP]

Here here!

 

[TurboS7]

The problem is that if UAL does go Chapter 11 then it owes nothing(tecnically is has no duty to pay unless told to by the courts everything goes on hold) on past leases, fuel charges, catering charges and maint. This will send a shock right through the industry. It would enable them to cut cost to compete and would put other airlines in trouble as they would have no choice but to cut fares for market share. I am still owed 45K from my business that receivable started out as a Chapter 11 then went to a Chapter 7 writeoff. The point is that I had to run my business with the loss on the books for 5 years, it sure didn't help the cash flow. There are people in the S.Fla area still trying to recover from the bankrupcy of EAL and Panam. It hurts and for all of our sakes I hope that it doesn't happen.

 

[sewertube]

Didn't mean to come off so cold...

Sorry to set off such a riot on here, I do apologize for the statement about bankruptcy not happening to a better airline. I have some emotions about them due to their lack of customer service over the years as a business traveler, shouldn't have let that out. But--

From a business standpoint I was merely saying in order to SAVE UAL the best alternative may be chapter 11, I did not say 13 so try to keep them straight. They are under such a financial drain, partly due to the high salaries they are paying, that it may be the only way to keep going. I just disagree with the on going attitude from senior pilots that feel getting furloughed is just something junior guys have to endure. I would reather see less pay to keep everyone employed, but I guess that is why I will never own a major airline.

I too am "discusted."

 

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Sure, flying is flying but crashing a 300+ pax airliner is a bigger deal than crashing a 12 seat aircraft.

I can think of a dozen folks who would beg to differ...

 

[XNav]

For those of you in disbelief over the financial state of UAL, I personally don't think the severity of their current situation can be overstated. They lost 35 bucks a share in '01 and are forecast to lose another 22 bucks a share this year. The stock is trading in the 14-15 dollar range as of today. That means two years of losses will total about FOUR TIMES THEIR MARKET CAP. Chapter 11 may be the best way to go while there is still some meat on the carcass to be salvaged. Waiting may simply be prolonging the inevitable while simultaneously limiting their options to reorganize and keep operating after a bankruptcy filing.