AMR Corp. and its subsidiaries (collectively “AMR”), including American Airlines Inc., filed for Chapter 11 protection in the Bankruptcy Court for the Southern District of New York (the “Court”) on November 29, 2011.
Introduction
Introduction
On March 5, 2012, Pemco World Air Services ("Pemco"), filed chapter 11 petitions for bankruptcy in the United States Bankruptcy Court for the District of Delaware. According to the Declaration of Pemco's CFO (the "Declaration"), Pemco describes itself as "an industry leader in maintenance, repair and overhaul for wide and narrow body aircraft and regional jets from around the world." Decl. at *2. In addition to maintenance and repair, Pemco also is one of the leading providers of narrow body aircraft cargo conversions. Id.
In Wells Fargo Bank Northwest v. US Airways, Inc., 2011 NY Slip Op 52188(U) (Sup. Ct. N.Y. County Dec. 1, 2011), Justice Bernard J. Fried held that a liquidated damages provision requiring payment of a holdover fee equal to twice the monthly rent was reasonable and did not function as a penalty under New York contract law. The case arose from three aircraft sale and leaseback transactions, pursuant to which Defendant US Airways, Inc. (“US Airways”), sold to Plaintiff Wells Fargo Bank Northwest (“Wells Fargo”), and Wells Fargo leased back to US Airways, three Boeing 737 aircraft.
While bankruptcy law and tort law may not seem related, it is important to know if your client has ever gone through a bankruptcy and, if so, the terms of its plan of reorganization. A recent Eighth Circuit decision confirmed the importance of knowing the ins and outs of a client’s bankruptcy and the terms of the applicable plan.
COMMITTEE OF CONCERNED MIDWEST FLIGHT ATTENDANTS FOR FAIR AND EQUITABLE SENIORITY INTEGRATION v. INTERNATIONAL BROTHERHOOD OF TEAMSTERS AIRLINE DIVISION (November 30, 2011)
On November 29, 2011, AMR Corporation, the parent company of American Airlines and American Eagle, and certain of its U.S. affiliates, including American Airlines and American Eagle, filed voluntary petitions for chapter 11 reorganization in the U.S. Bankruptcy Court for the Southern District of New York.
The McCaskill-Bond Amendment to the Federal Aviation Act provides that a merger of air carriers requires the new entity to merge the seniority lists of the two carriers’ employees. Republic Airways acquired Midwest Airlines, and thereafter the Teamsters Union, which represented the flight attendants at Republic’s older carriers, refused to integrate the seniority lists for flight attendants and placed Midwest’s flight attendants at the bottom of the seniority roster. A group of Midwest flight attendants challenged the action, asserting that it violated the amendment.
Earlier today AMR Corporation, its subsidiary American Airlines, Inc., and 18 other affiliates ("Debtors") filed petitions under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York in Manhattan.1 The case was assigned to Bankruptcy Judge Sean H. Lane. The Debtors have asked the Court to consolidate all 20 cases for procedural purposes under the captionIn re: AMR Corporation, Case No. 11-15463.
Last month, the United States Court of Appeals for the Eleventh Circuit upheld the Bankruptcy Court and United States District Court for the Middle District of Florida determination that the authorized swapping of parts among aircraft to maximize efficiency “did not and could not commingle the participants’ ownership interests.” In re Avantair Inc., No. 15-10303, slip op. (Eleventh Circuit, February 3, 2016). The ruling helps to clarify uncertainties regarding the legal status of fractional ownership arrangements.
Brief Overview