Originally Posted by
MainlineFlyer
I mean buying a fully functioning airline with trained and proficient staff, gates, etcetera holds some value above its liquidation value. I'm not arguing that it will happen, only that it could. Most companies purchased in BK have had an upside down balance sheet so anything could happen.
Also I'd argue that when many of the debt holders won't see a dime in Ch7 perhaps they would accept a lesser amount to forgive the debt. Half of something is better than nothing at all.
The debt holders will get paid first ahead of everyone else, even employee wages. To say "they won't get a dime" is not even close. They literally get every penny until their "senior secured notes" are paid off. That's why they agreed to the DIP financing and convert their debt to the highest priority debt possible, plus take control of the company.
The fully functioning airline is a big money loser. Its all leveraged and loses more than it makes. Its a huge liability. Unfortunately its worth more liquidated to the people making the decisions and the ones who took the financial risk.