Business Finance & Restructuring Representations
Representation of AMR Corporation, American Airlines, Inc., one of the world’s largest airlines, and their debtor affiliates in the most successful chapter 11 cases for an airline in recent history. American Airlines emerged from bankruptcy upon consummation of a chapter 11 plan premised upon a merger with US Airways Group, Inc., which not only enabled creditors to receive a full recovery on their claims, but also provided a substantial distribution to stockholders. During the pendency of the chapter 11 cases, which involved $24.7 billion in assets and $29.5 billion in liabilities, Weil assisted American while it achieved the highest revenues in the company’s history (approximately $24.8 billion in 2012); added new and expanded routes in international markets with strong growth products; took delivery of 75 new aircraft; entered into new collective bargaining agreements with its unions; evaluated and/or negotiated more than 700 facility leases and over 9,000 vendor and supplier agreements, and achieved balance sheet improvements of approximately $2.5 billion, resulting in estimated principal and interest savings of approximately $1.3 billion over five years. In addition to the operational and balance sheet achievements, the chapter 11 plan encompassed a comprehensive resolution of complex issues involving intercompany claims and intercreditor issues. The resolution also involved the compromise of potential avoidance actions under the Bankruptcy Code. The chapter 11 plan utilizes a unique and perhaps unprecedented market-based test based on the actual trading value of the new common stock issued under the plan to determine the allocation of value distributed under the plan to creditors and existing stockholders. Unlike most chapter 11 plans, which are based on valuation metrics provided by investment bankers, the parties involved in the plan negotiations determined that the actual trading price of the common stock of the new merged entity would be the most accurate barometer of value and would provide the most equitable manner to determine the allocation of value under the plan to economic stakeholders. As a result of the plan and the merger to form American Airlines Group Inc., creditors received a full recovery on their claims and stockholders received a guaranteed minimum distribution of 3.5% of the common equity of the parent of the merged airlines, with the potential to receive additional shares. This result is unprecedented in airline chapter 11 cases, and extraordinary in any chapter 11 case.
Representation of General Motors Corporation, (GM), the largest automobile manufacturer in the United States and the second largest in the world, in the chapter 11 cases of Delphi Corporation and its affiliates, one of the largest global automotive parts supplier. Delphi, which was then GM’s largest supplier, was spun off from GM, which was then Delphi’s largest customer. Delphi’s chapter 11 cases, which lasted over four years, involved a number of surprises that resulted in several revised case strategies, many of which required GM’s involvement. From Delphi’s contested motion to reject more than 5,000 of GM’s supply contracts to the ultimate sale of portions of Delphi’s business to GM, Weil zealously represented GM in all aspects of Delta’s chapter 11 cases. During the chapter 11 cases, Weil negotiated and renegotiated a comprehensive settlement agreement and restructuring agreement between GM and Delphi’s claims against each other and outlined the business relationship between the parties going forward. After Delphi’s confirmed chapter 11 plan fell through when its plan investors pulled out, Weil, on behalf of GM, negotiated a series of liquidity support agreements to provide liquidity to Delphi and negotiated a master disposition agreement with Delphi pursuant to which certain of Delphi’s U.S. facilities and Global Steering Business were sold to GM and the balance of Delphi’s U.S. and non-U.S. businesses were jointly acquired by GM and Delphi’s lenders. The total consideration for these transactions and related funding exceeded $4 billion, in addition to forgiveness of billions of dollars owed by Delphi to GM and Delphi’s lenders.
Represented DVB Bank in connection with various out-of-court restructurings in the shipping industry.
Excel Maritime Carriers Ltd., representing DVB Bank, as bi-lateral lender and syndicate member, in the restructuring of the Company’s credit facilities.
Representation of GE Capital Aviation Services and certain affiliates in connection with the following matters:
- Mesa Air Group, Inc.: Representation of GECAS and certain of its related entities as a creditor pursuant to certain aircraft engine and single investor aircraft lease agreements in the chapter 11 cases of Mesa Air Group, Inc. and certain of its affiliates. Among other things, Weil represented the GECAS parties with regard to their respective claims against Mesa, including the sale of certain claims to third parties prior to Mesa’s plan of reorganization going effective.
- Other Airline Chapter 11 Cases: Representation of GECAS and its affiliates in various capacities in the chapter 11 cases of (i) Aloha Airlines, Inc. and its affiliates; (ii) ATA Airlines, Inc. and its affiliates; (iii) Delta Air Lines, Inc. and its affiliates; (iv) FLYi, Inc. and its affiliates; (v) Frontier Airlines Holdings, Inc. and its affiliates; (vi) Gemini Cargo Logistics and its affiliates; (vii) Northwest Airlines Corporation and its affiliates; (viii) Skybus Airlines, Inc. and its affiliates; and (ix) UAL Corporation (United Airlines) and its affiliates.
Representation of General Motors Corporation, the largest automobile manufacturer in the United States and the second largest in the world, and its debtor affiliates, with assets of more than $82 billion and liabilities of over $172 billion in their historical restructuring and chapter 11 cases. Weil successfully obtained approval of the unprecedented section 363(b) sale of the ongoing company to a purchaser sponsored by the U.S. Treasury – consummated in only forty days -- resulting in a “New GM” that avoided a broader systemic failure by enabling the ongoing viability of a worldwide automobile manufacturer and saving hundreds of thousands of jobs. Although creditors filed more than 70,000 proofs of claim in the aggregate amount of $274 billion, and its chapter 11 case was among the largest and most complex ever filed in the United States, General Motors confirmed and consummated its chapter 11 plan less than 22 months after the commencement of the cases. Weil’s innovative legal strategies allowed General Motors to reduce the aggregate amount of claims to less than $50 billion by the time of confirmation. Weil also was instrumental in the successful resolution of General Motors’ environmental liabilities at eighty-nine sites across the US through a settlement with the U.S. Environmental Protection Agency, the U.S. Justice Department, fourteen states, and the Saint Regis Mohawk Tribe establishing a $773 million Environmental Response Trust to conduct, manage, and fund cleanup and redevelopment at these sites. Weil was recognized by The American Lawyer for bringing the General Motors enterprise out of chapter 11 in just forty days.
HSH Nordbank, represented certain funds and related trusts established by J.C. Flowers & Co., as investors, in the chapter 11 bankruptcy of HSH Delaware, a company created to buy a 26% stake in the world’s largest shipping financier, HSH Nordbank.
Representation of Southern Air Holdings, Inc., a portfolio company, and certain affiliates, providers of governmental and commercial air cargo transportation services, in their prenegotiated chapter 11 cases. Faced with deteriorating financial performance and immediate liquidity concerns, Southern Air commenced discussions with its secured lenders and the Oak Hill portfolio companies from which it leased aircraft. With Weil’s assistance, Southern Air and its key stakeholders formulated a restructuring strategy, embodied in a plan support agreement to bridge near-term liquidity shortfalls through postpetition financing, reduce Southern Air’s secured debt by more than two-thirds of its prepetition amount, and streamline Southern Air’s operations by restructuring its fleet and eliminating burdensome lease obligations. To that end, Southern Air sought confirmed its chapter 11 plan roughly six months after commencing the chapter 11 cases.
TBS International Inc., represented bank syndicate under a loan facility, in the pre-packaged chapter 11 reorganization of TBS International Inc., a non-U.S. flag dry-bulk carrier.
U.S. Shipping Partners, a Jones Act long-haul marine transportation company, in its pre-negotiated chapter 11 filing.