Bankruptcy case costs American Airlines nearly $400 million | Dallas Morning News 6-25-14

Posted: June 26, 2014 in Uncategorized

The American Airlines Inc. bankruptcy case will earn attorneys, financial advisers, aircraft consultants and others at least $375 million in fees and $16 million in expenses, according to a final accounting.In a report filed late Tuesday, fee examiner Robert Keach recommended that U.S. Bankruptcy Judge Sean Lane approve $371.7 million in final fees and $16.3 million in expenses to 47 professional groups who worked on the 23-month case.Those numbers don’t include an additional $3.6 million in fees and expenses, including $476,519 to Keach; $2.1 million to Bernstein, Shur, Sawyer & Nelson, P.A., the law firm that assisted Keach; and smaller amounts to several other professional groups.The total also doesn’t include confidential but large financing fees paid to aircraft consultants SkyWorks Capital LLC, which handled the restructuring of American’s aircraft financing. The publicly disclosed part of SkyWorks’ fees totaled $11.7 million.Keach’s report is to be the final tally on the bankruptcy case, which began Nov. 29, 2011, when AMR Corp., American Airlines and various subsidiaries sought protection from creditors under Chapter 11 of the federal bankruptcy code.The meter for bankruptcy fees and expenses stopped Oct. 21, 2013, when Lane confirmed the AMR/American plan of reorganization. American has continued to incur bankruptcy-related costs since then, but those fees and expenses are a matter for the company to review, not the judge.The effective date of the plan was delayed while American fought a U.S. Department of Justice lawsuit that sought to block American’s merger with US Airways Inc. The parties settled the lawsuit Nov. 12.American finally put the restructuring plan into effect Dec. 9 when it merged with US Airways to form American Airlines Group Inc.Weil, Gotshal & Manges LLP, American’s lead bankruptcy counsel, heads the list of professionals with fees of $74.5 million and expenses of $2.9 million, or $77.4 million.Next is Debevoise & Plimpton LLP, a law firm that handled aircraft financing and leasing issues. The firm is in line for $53.7 million in fees and $371,194 in expenses, or $54.1 million.The law firm for the unsecured creditors committee, Skadden, Arps, Slate, Meagher & Flom LLP, will get $27.8 million in fees and $1.1 million in expenses, or $28.9 million. Of that, lead counsel Jack Butler racked up $4.9 million in fees.In his report to Lane, Keach praised the reasonableness of the fees and expenses, as well as the results from the reorganization of AMR, American and related parties.“These Chapter 11 cases are among the most successful of all time, and the professionals in these cases have collectively achieved a remarkable outcome, resulting in full payment of all claims and a substantial return to the holders of equity interests,” Keach wrote. “This result was achieved via the merger of two of the world’s largest airlines in the context of a Chapter 11 plan of reorganization, an unprecedented event.”He said the cases “constitute perhaps the most efficient airline reorganization case on record in terms of restructuring costs.”Lane will consider approving Keach’s report and the payment of fees and expenses at a hearing Tuesday in Lane’s Manhattan courtroom.

via Bankruptcy case costs American Airlines nearly $400 million | Dallas Morning News.


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