The plan going forward
10-04-2024 | 10:38 AM
#532
Banned
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10-04-2024 | 10:56 AM
#533
Prime Minister/Moderator
Joined: Jan 2006
Posts: 45,167
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From: Engines Turn or People Swim
The judge certainly could order a liquidation and fire sale of assets.
If the creditors and judge don't see a profitable way forward, they might lean to fire sale. If they think the company can restructure so as to be able to make future payments, likely negotiated to a reduced level, they might opt for that.
10-04-2024 | 11:02 AM
#534
Prime Minister/Moderator
Joined: Jan 2006
Posts: 45,167
Likes: 803
From: Engines Turn or People Swim
Yup.
It's common for managers to not carry a lot of cash on hand, and to balance the owned-outright assets against leases, etc to avoid creating a tempting target for hostile takeover by corporate raiders. For example if you have $10B in cash, and the stock market has a bad day anybody could swoop in and buy a controlling interest for pennies on the dollar, just to tap the cash.
So debt often serves as a poison pill to discourage the worst sort of corporate predation.
Caveat: With a large major airline, presumably the government would at least attempt to intervene to prevent blatant corporate raidership. But that depends on who's in office, and the current industry climate. So airlines are probably less exposed to it than other industries.
It's common for managers to not carry a lot of cash on hand, and to balance the owned-outright assets against leases, etc to avoid creating a tempting target for hostile takeover by corporate raiders. For example if you have $10B in cash, and the stock market has a bad day anybody could swoop in and buy a controlling interest for pennies on the dollar, just to tap the cash.
So debt often serves as a poison pill to discourage the worst sort of corporate predation.
Caveat: With a large major airline, presumably the government would at least attempt to intervene to prevent blatant corporate raidership. But that depends on who's in office, and the current industry climate. So airlines are probably less exposed to it than other industries.
10-04-2024 | 12:20 PM
#536
Line Holder
Joined: Mar 2021
Posts: 1,768
Likes: 28
in airline-world, anything is possible. This includes, some or all, of:
1. Ch.11 Bankruptcy filing
2. Attempted acquisition by another airline
3. Investment group (RE: Elliott Management type) buy the company
At the current share price, Spirit's market cap is 245M.
1. Ch.11 Bankruptcy filing
2. Attempted acquisition by another airline
3. Investment group (RE: Elliott Management type) buy the company
At the current share price, Spirit's market cap is 245M.
10-04-2024 | 03:27 PM
#538
Gets Weekends Off
Joined: Jul 2008
Posts: 5,590
Likes: 346
Bankruptcy has always been inevitable once the merger failed. The CEO lied to you guys and put you in denial. Anyone not affected can see it coming.
10-04-2024 | 04:26 PM
#539
Line Holder
Joined: Jul 2017
Posts: 356
Likes: 74
It’s also possible to just shut down. Midwest Express, ATA, Braniff, numerous regionals, etc. it has happened before.
Bankruptcy has always been inevitable once the merger failed. The CEO lied to you guys and put you in denial. Anyone not affected can see it coming.
Bankruptcy has always been inevitable once the merger failed. The CEO lied to you guys and put you in denial. Anyone not affected can see it coming.
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