American finds cash cushion
05-25-2020, 07:42 PM
#61
Gets Weekends Off
Joined APC: Jan 2019
Posts: 531
Shareholders can hold onto their shares during bankruptcy, right? If any airline goes through chapter 11, they may emerge much leaner, meaner, and having made large institutional changes into a new landscape, which may be very favorable for a stock price.
https://www.wsj.com/articles/hertz-w...d=hp_lead_pos7
Carl Ichan may buy more hertz after they reorganize.
Also, good to read a good article about one of the largest companies to file. A legit post-mortem, not some seeking alpha artilcle written by someone trying to bouy their short / long position. Will we see an airline file? Who will run out of cash first? American has a lot of debt but not near-term payments to make, which is where the debt actually comes into play.
https://www.wsj.com/articles/hertz-w...d=hp_lead_pos7
Carl Ichan may buy more hertz after they reorganize.
Also, good to read a good article about one of the largest companies to file. A legit post-mortem, not some seeking alpha artilcle written by someone trying to bouy their short / long position. Will we see an airline file? Who will run out of cash first? American has a lot of debt but not near-term payments to make, which is where the debt actually comes into play.
05-26-2020, 02:10 AM
#62
Gets Weekends Off
Joined APC: Jan 2016
Position: Left
Posts: 1,188
Originally Posted by watch
Shareholders can hold onto their shares during bankruptcy, right? If any airline goes through chapter 11, they may emerge much leaner, meaner, and having made large institutional changes into a new landscape, which may be very favorable for a stock price.
https://www.wsj.com/articles/hertz-w...d=hp_lead_pos7
Carl Ichan may buy more hertz after they reorganize.
Also, good to read a good article about one of the largest companies to file. A legit post-mortem, not some seeking alpha artilcle written by someone trying to bouy their short / long position. Will we see an airline file? Who will run out of cash first? American has a lot of debt but not near-term payments to make, which is where the debt actually comes into play.
https://www.wsj.com/articles/hertz-w...d=hp_lead_pos7
Carl Ichan may buy more hertz after they reorganize.
Also, good to read a good article about one of the largest companies to file. A legit post-mortem, not some seeking alpha artilcle written by someone trying to bouy their short / long position. Will we see an airline file? Who will run out of cash first? American has a lot of debt but not near-term payments to make, which is where the debt actually comes into play.
GM zero the shares out and sold all new shares after bankruptcy. It is an easy way to get a lot of cash reselling all the shares .
05-27-2020, 09:24 AM
#63
Line Holder
Joined APC: Jul 2018
Posts: 34
I think folks forget that you can’t “just declare bankruptcy” and poof...all your debt goes away. It’s cost quite a bit to reorganize and unless you have a compelling reason for why you won’t be able to repay your debt in the future, it will still be your debt.
Since most of our debt is tied up in airplanes and the lenders have no where to send those airplanes if we stop paying, they are WAY better off restructuring our debt out of BK than to hold the hard line and take the aircraft away.
A BK judge doesn’t care if it takes 20 years to pay off our debt and during that time no profit sharing or dividends will be paid out. He/she will say “oh, it can be paid off. No debt relief for you.” Now if they think there is no possible way our debt will ever be paid off and the lenders refuse to restructure, then a BK may be the path. Either way it isn’t happening until at least 2022 when our first debt payment is due.
Also, it doesn’t matter if DP is worth $50M or $150M, he has over 2 million shares still. Even at $150M, no one wants to lose $20M (based on $10/share) overnight. Rich people don’t get rich by throwing away money. There is a chance he keeps his shares post BK but that’s up to the judge to decide. I find it hard to believe that DP has any desire for this company to declare. Now if we start seeing him dump his shares over the next year...writing may be on the wall at that point.
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Since most of our debt is tied up in airplanes and the lenders have no where to send those airplanes if we stop paying, they are WAY better off restructuring our debt out of BK than to hold the hard line and take the aircraft away.
A BK judge doesn’t care if it takes 20 years to pay off our debt and during that time no profit sharing or dividends will be paid out. He/she will say “oh, it can be paid off. No debt relief for you.” Now if they think there is no possible way our debt will ever be paid off and the lenders refuse to restructure, then a BK may be the path. Either way it isn’t happening until at least 2022 when our first debt payment is due.
Also, it doesn’t matter if DP is worth $50M or $150M, he has over 2 million shares still. Even at $150M, no one wants to lose $20M (based on $10/share) overnight. Rich people don’t get rich by throwing away money. There is a chance he keeps his shares post BK but that’s up to the judge to decide. I find it hard to believe that DP has any desire for this company to declare. Now if we start seeing him dump his shares over the next year...writing may be on the wall at that point.
Sent from my iPhone using Tapatalk
05-27-2020, 09:29 AM
#64
Line Holder
Joined APC: Jul 2018
Posts: 34
Originally Posted by Diesel Hawg
I think folks forget that you can’t “just declare bankruptcy” and poof...all your debt goes away. It’s cost quite a bit to reorganize and unless you have a compelling reason for why you won’t be able to repay your debt in the future, it will still be your debt.
Since most of our debt is tied up in airplanes and the lenders have no where to send those airplanes if we stop paying, they are WAY better off restructuring our debt out of BK than to hold the hard line and take the aircraft away.
A BK judge doesn’t care if it takes 20 years to pay off our debt and during that time no profit sharing or dividends will be paid out. He/she will say “oh, it can be paid off. No debt relief for you.” Now if they think there is no possible way our debt will ever be paid off and the lenders refuse to restructure, then a BK may be the path. Either way it isn’t happening until at least 2022 when our first debt payment is due.
Also, it doesn’t matter if DP is worth $50M or $150M, he has over 2 million shares still. Even at $150M, no one wants to lose $20M (based on $10/share) overnight. Rich people don’t get rich by throwing away money. There is a chance he keeps his shares post BK but that’s up to the judge to decide. I find it hard to believe that DP has any desire for this company to declare. Now if we start seeing him dump his shares over the next year...writing may be on the wall at that point.
Sent from my iPhone using Tapatalk
Since most of our debt is tied up in airplanes and the lenders have no where to send those airplanes if we stop paying, they are WAY better off restructuring our debt out of BK than to hold the hard line and take the aircraft away.
A BK judge doesn’t care if it takes 20 years to pay off our debt and during that time no profit sharing or dividends will be paid out. He/she will say “oh, it can be paid off. No debt relief for you.” Now if they think there is no possible way our debt will ever be paid off and the lenders refuse to restructure, then a BK may be the path. Either way it isn’t happening until at least 2022 when our first debt payment is due.
Also, it doesn’t matter if DP is worth $50M or $150M, he has over 2 million shares still. Even at $150M, no one wants to lose $20M (based on $10/share) overnight. Rich people don’t get rich by throwing away money. There is a chance he keeps his shares post BK but that’s up to the judge to decide. I find it hard to believe that DP has any desire for this company to declare. Now if we start seeing him dump his shares over the next year...writing may be on the wall at that point.
Sent from my iPhone using Tapatalk
Btw, all that is just my opinion. Things can obviously change and we could declare BK tomorrow and I can’t say I would be shocked (mildly surprised but not shocked). I’m not sure what would happen in that case but I can’t see a judge wiping our debt before we prove we can’t pay it.
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05-27-2020, 12:13 PM
#65
Line Holder
Joined APC: Mar 2014
Posts: 34
Just some samples from previous CEO’s
Lehman Brother’s CEO
Richard S Fuld Jr.
was too big to fail but filed for bankruptcy protection under Chapter 11 on September 15, 2008.
He received $484 million in salary, bonuses and stock options from 2000-2008.
Now: Richard S Fuld Jr.
Matrix Private Capital.
Matrix Private Capital Group is a diversified asset management firm that provides advisory and alternative investment solutions to high net worth individuals, family offices and institutions.
“Whatever it is, enjoy the ride. No regrets.”
Eastern Airlines’s CEO
Frank Lorenzo
was a fierce warrior, after acquiring Continental Airlines in a hostile takeover and saddling it with enormous debt, submerged the company in Chapter 11 bankruptcy to wash it clean of its union contracts. He exited the industry in 1990 with a pocketful of money, walking away with about $30 million in proceeds from the sale, severance pay and salary.
Lorenzo got an immediate cash severance payment of about $17.13 million, plus an additional $2.7 million paid over three years and a $10.8 million payment from his stake in Continental, for a total of $30.63 million.
Now: Frank Lorenzo
Savoy Capital, Inc.
Savoy Capital, Inc. is an investment advisory firm. The Company invests in various areas as well as engages in private investment, venture capital, later stage situations and management led buyouts.
"I'm not paid to be a candy ass. I'm paid to go and get a job done."
-Eastern Airlines & Lehman Brothers were too big to fail back then...hang tight guys...this is “The Perfect Storm.”
Only time will tell...
“Doug Parker Got It Right!”
~Frank Lorenzo~
February 2013
https://www.thestreet.com/.amp/inves...right-11840494
Lehman Brother’s CEO
Richard S Fuld Jr.
was too big to fail but filed for bankruptcy protection under Chapter 11 on September 15, 2008.
He received $484 million in salary, bonuses and stock options from 2000-2008.
Now: Richard S Fuld Jr.
Matrix Private Capital.
Matrix Private Capital Group is a diversified asset management firm that provides advisory and alternative investment solutions to high net worth individuals, family offices and institutions.
“Whatever it is, enjoy the ride. No regrets.”
Eastern Airlines’s CEO
Frank Lorenzo
was a fierce warrior, after acquiring Continental Airlines in a hostile takeover and saddling it with enormous debt, submerged the company in Chapter 11 bankruptcy to wash it clean of its union contracts. He exited the industry in 1990 with a pocketful of money, walking away with about $30 million in proceeds from the sale, severance pay and salary.
Lorenzo got an immediate cash severance payment of about $17.13 million, plus an additional $2.7 million paid over three years and a $10.8 million payment from his stake in Continental, for a total of $30.63 million.
Now: Frank Lorenzo
Savoy Capital, Inc.
Savoy Capital, Inc. is an investment advisory firm. The Company invests in various areas as well as engages in private investment, venture capital, later stage situations and management led buyouts.
"I'm not paid to be a candy ass. I'm paid to go and get a job done."
-Eastern Airlines & Lehman Brothers were too big to fail back then...hang tight guys...this is “The Perfect Storm.”
Only time will tell...
“Doug Parker Got It Right!”
~Frank Lorenzo~
February 2013
https://www.thestreet.com/.amp/inves...right-11840494
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