Mesa Air Group Chapter 11 Info
02-10-2010 | 02:22 PM
#381
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From: NOYDB
As we saw with the B1900's, MAG was ordered to return the aircraft in flyable condition and all engines in airworthy condition. If Judge Glenn orders MAG to return any engines to the leassor; MAG will be required to return the engines, even if they are on an a/c in service. I'm sure that a schedule will be agreed to; to allow MAG to schedule those a/c in for mx inorder to remove those engines.
02-10-2010 | 03:57 PM
#382
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From: blueJet
I'm not motivated enough to go looking for it, but as I recall JO admitted that by digging into the spares on hand, many millions could be saved on engine overhauls. Stockholders were overjoyed. Wonderful short-term plan.
02-10-2010 | 04:50 PM
#383
Prime Minister/Moderator
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From: Engines Turn or People Swim
It generally freezes any actions until the court can sort things out, a temporary measure.
Mesa has three options with existing contracts...
1. Affirm. This continues the contract as before, and mesa must make all past, current, and future payments.
2. Reject. If the court allows this, the contract is voided and any monies owed become part of the debt estate. But this does NOT in any way void a lien or interest on collateral property, or affect the owner's property rights in the case of leased assets. Mesa does not have to keep making payments, but the owner is sure as hell entitled to get their stuff back...intact.
3. Negotiate for different contract terms. Anything which both parties (and the court) agree on is fair game.
Mesa has three options with existing contracts...
1. Affirm. This continues the contract as before, and mesa must make all past, current, and future payments.
2. Reject. If the court allows this, the contract is voided and any monies owed become part of the debt estate. But this does NOT in any way void a lien or interest on collateral property, or affect the owner's property rights in the case of leased assets. Mesa does not have to keep making payments, but the owner is sure as hell entitled to get their stuff back...intact.
3. Negotiate for different contract terms. Anything which both parties (and the court) agree on is fair game.
02-10-2010 | 10:02 PM
#384
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It generally freezes any actions until the court can sort things out, a temporary measure.
Mesa has three options with existing contracts...
1. Affirm. This continues the contract as before, and mesa must make all past, current, and future payments.
2. Reject. If the court allows this, the contract is voided and any monies owed become part of the debt estate. But this does NOT in any way void a lien or interest on collateral property, or affect the owner's property rights in the case of leased assets. Mesa does not have to keep making payments, but the owner is sure as hell entitled to get their stuff back...intact.
3. Negotiate for different contract terms. Anything which both parties (and the court) agree on is fair game.
Mesa has three options with existing contracts...
1. Affirm. This continues the contract as before, and mesa must make all past, current, and future payments.
2. Reject. If the court allows this, the contract is voided and any monies owed become part of the debt estate. But this does NOT in any way void a lien or interest on collateral property, or affect the owner's property rights in the case of leased assets. Mesa does not have to keep making payments, but the owner is sure as hell entitled to get their stuff back...intact.
3. Negotiate for different contract terms. Anything which both parties (and the court) agree on is fair game.
4. Round and round and down
02-10-2010 | 10:06 PM
#385
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As we saw with the B1900's, MAG was ordered to return the aircraft in flyable condition and all engines in airworthy condition. If Judge Glenn orders MAG to return any engines to the leassor; MAG will be required to return the engines, even if they are on an a/c in service. I'm sure that a schedule will be agreed to; to allow MAG to schedule those a/c in for mx inorder to remove those engines.
02-11-2010 | 05:25 AM
#387
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From: NOYDB
They're not trying to return all their spare engines. They're just trying to decrease the amount of spares they have in their inventory. MAG is trying to return several CF343A1 and CF342B19 engines (CRJ-200), and the RR AE3007 (ERJ) spare engines. I know for sure they're going to try and dump all the CR2s back on to the leassors, so they really won't need any of those spares. They're also asking the court to dump the ERJ's whenever they want in future, incase they loose or take a settlement in the DCI ERJ litigation. They plan for sure on keeping all the CR7 and CR9's, because none of the CF342C10 or CF342D24's are on the abandon request.
02-11-2010 | 05:57 AM
#388
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What is the likelihood that Mesa could actually run out of cash and be forced to shut down all operations?
It seems as though this is not at all out of the question and will result in a vastly different landscape in the world of contract 'regional' carriers.
It seems as though this is not at all out of the question and will result in a vastly different landscape in the world of contract 'regional' carriers.
02-11-2010 | 07:08 AM
#389
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There are financial institutions out there that specialize in this kind of thing, offering high interest (high risk) loans to companies in bankruptcy. The idea is if they make it out of bankruptcy, these companies will make their money on the high interest loans. However, as you can imagine there's a high risk involved, hence the high interest rate.
02-11-2010 | 07:26 AM
#390
Prime Minister/Moderator
Joined: Jan 2006
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From: Engines Turn or People Swim
Correct me if I'm wrong here folks but I think that to even begin Ch. 11 hearings you need to prove you have enough cash on hand to make it through. Or at least show you have lines of credit ready to make it through.
There are financial institutions out there that specialize in this kind of thing, offering high interest (high risk) loans to companies in bankruptcy. The idea is if they make it out of bankruptcy, these companies will make their money on the high interest loans. However, as you can imagine there's a high risk involved, hence the high interest rate.
There are financial institutions out there that specialize in this kind of thing, offering high interest (high risk) loans to companies in bankruptcy. The idea is if they make it out of bankruptcy, these companies will make their money on the high interest loans. However, as you can imagine there's a high risk involved, hence the high interest rate.
That is a smart move on their part, but I still wonder if they actually have enough cash to restructure, or if they are relying on the DAL lawsuit...that would be a desperate game. OJ may assume that DL will settle just to be done with it, but DL might decide to take it to trial and put a stake in mag, if they think they have a good case.
The BK judge cannot make a summary decision against DL on that case...DL has the right to normal due process if they want it.
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