Originally Posted by
stbloc
Why? So they can continue to loose money quarter after quarter until its all gone? Or because they want to give union workers bigger contracts just so they end up screwing creditor and employees when they file? That cash on hands gives them more leverage to emerge from bankruptcy then if they entered with nothing. If they go into BK with nothing they run the risk of full liquidation. You got to have assets and cash or they will not be able to restructure and attract exit financing. No cash or assets, no airline, plain and simple. Plus they can screw the employee’s into lower wages, terminate the pensions, and force all creditors to take a haircut on their notes. BK is a win win for AMR. In 2004 they hired Goldman to studying the airline and they suggested filing then. They said no way the airline will survive under its current model. They were right, we are weeks or months away from AMR walking into a federal court near you.
It does not work like that, when you go BK that money becomes the courts and is used towards debt and the restructuring, the court if they wanted to could put it toward pensions. Also top management is going to lose a lot in bk.