April 4, 2008
ATA Bankruptcy Case
ATA filed a chapter 11 petition in Indianapolis on April 2, Case No. 08-03675. According to the first day motions, it lost $75 million in 2007 on $737 million in gross revenues. It has 29 aircraft, three of which are owned and the remainder leased. It has 2,200 employees. The immediate reason given for the bankruptcy filing is "due to ATA’s financial and operational predicament, ATA’s stockholders and the Secured Lenders will not provide additional capital or loans sufficient to maintain operations." That's not a shock considering that the the secured debt, according to the estimate of Steven Turoff, the turnaround expert, is about $350 million and the value of the collateral is about $50 million. The immediate problem arose when FedEx cancelled a contract with ATA so says ATA which "will result in the loss of substantially all of the Debtor’s AMC charter business."
April 3, 2008
An Evening and Dinner with the BAP
An Evening and Dinner with the Bankruptcy Appellate Panel
sponsored by Central District Consumer bankruptcy Attorneys Assoc.
Share an appealing evening with BAP Judges, Bankruptcy Judges, CDCBAA Members and other interested parties
“Volume II: Effective advocacy before the BAP:
BAP Panel Judges Dennis Montali, Randall Dunn and Bruce Markell together with BAP Clerk of Court,
June 19, 2008
Cocktails at 6:00 p.m.
Followed by Dinner at 7:00 p.m.
1911 Sunset Boulevard
Los Angeles, CA 90026
$50.00 for members
$65.00 for non-members
$30 for government employees
*No tickets will be sold at the door*
RSVP to PeterMLively@aol.com
Please mail check payable to “CDCBAA” to:
Henry M. Toles
11746 Goshen Avenue, Suite #1
Los Angeles, California 90049-6113
Aloha Airlines Chapter 11 Case
In the Aloha bankruptcy case, filed March 20 in Hawaii, Aloha reported the following losses: For the month of January, 2008, a net loss of $11 million, on operating revenues of $35 million. For the calendar year 2007, a net loss of $81 million, on operating revenues of $407 million. For 2006, a net loss of $46 million on operating revenues of $416 million. For 2005, a net loss of $41.2 million, on operating revenues of approximately $455 million.
Aloha has 27 airplanes and 3500 employees. It reports $216 million in assets and $285 million in liabilities of which $162 million is secured. Aloha asserts that the reason for the current filing is increased competition especially from go! Airlines. Aloha sued Mesa Air Group under various predator competition theories and trial is set for later this year.
I am a little surprised the case was filed in Hawaii but that is where Aloha is located and that is where the prior case was filed. Compare Sharper Image located in San Francisco but filed in Delaware. Aloha's counsel is a sole practitioner, David Farmer who is supported - backed up - by a Florida firm.
April 2, 2008
Sharper Image Creditor's Committee Retains Professionals
So the Creditor's Committee in the Sharper Image case has hired counsel. Makes sense, the Committee's job, according to Section 1103(c) is
(1) consult with the [debtor] concerning the administration of the case;
(2) investigate the acts, conduct, assets, liabilities, and financial condition of the debtor, the operation of the debtor’s business and the desirability of the continuance of such business, and any other matter relevant to the case or to the formulation of a plan;
(3) participate in the formulation of a plan, advise those represented by such committee of such committee’s determinations as to any plan formulated, and collect and file with the court acceptances or rejections of a plan;
I.e., Consult, investigate and help formulate a Plan.
So "lead counsel" for the Committee is Cooley Godward Kronish. The partners assigned to the case from that firm will bill $850 to $680 per hour. The Committee needs "Delaware counsel" as well, Whiteford Taylor Preston, whose fees are down right reasonable at $530 to $390 per hour for partners. The Committee, of course, also needs a "financial adviser" and has chosen Loughlin Meghji & Company whose Principal/Managing Directors will bill $750 to $625 per hour.
Sharper Image still has not filed its "schedules" in the case. This will list its assets and liabilities. It will include a "statement of financial affairs," 20 questions or so which I am looking forward to reviewing.
April 1, 2008
Online International Bankruptcy Course
from Credit Slips this morning
posted by Bob Lawless
My friend, Professor David Epstein at Southern Methodist University, was telling me about an innovative course in International Bankruptcy. The course is offered at NYU, but through distance learning technology, law students at other schools can participate. I asked David if he would write up a few paragraphs about his experience with the course that I could share with Credit Slips readers. Here is what David wrote back.
I have often thought that students who are considering a transaction practice would benefit from a course in International Bankruptcy. The problem always has been that very few law schools have faculty members (or adjuncts) willing and/or prepared to teach such a course. I have been working with the American College of Bankruptcy (ACB) to address this need.
Thanks to the support of the ACB and the help of Kaplan Educational Corp. and Thomson/West, we are offering a two-credit course in International Bankruptcy for students at NYU, Tulane, and Utah this semester. Most of the teaching is done by four American lawyers – Don Bernstein, Richard Broude, Dan Glosband, and Lewis Kruger. With the ACB's financial help, they have been joined not only by New York bankruptcy judges but also by judges, lawyers, and professors from around the world. The syllabus includes not only Chapter 15 but also topics such as use of Chapter 11 by foreign nationals, a comparison of bankruptcy administration in the United States and other countries, and sovereign debt.
With Kaplan providing and supporting the technology, our faculty has done a great job of delivering the course content. While I have been somewhat less stellar in the role of "course administrator," I think I have learned from my mistakes. We're looking to expand the number of participating law schools.
If bankruptcy professors at other schools want to talk about how to make International Bankruptcy available to their students in the spring of 2009, please contact me.
Knowing David, I am sure his course administrator role has been stellar. Thanks for sharing the information, David.
March 31, 2008
Public Counsel Law Center to Honor Two in Los Angeles
The Public Counsel William J. Lasarow Awards will be given to Los Angeles attorneys Faye C. Barta and Henry M. Toles at its Annual Pro Bono Award Reception on April 17, 2008. The award presentation will take place at The Standard at 550 S. Flower in Los Angeles at 6:30 p.m. by Judges Vincent Zurzolo, Thomas Donovan and Maureen Tighe.
For more information contact Marisa Hawkins at (213) 385-2977, ext 115 or check out the Public Counsel Law Center website at www.publiccounsel.org. Public Counsel is looking also for volunteer attorneys to help prospective debtors file bankruptcy. Call Marisa to volunteer.
March 30, 2008
DePaul Business & Commercial Law Journal's Upcoming Annual Symposium
Dear Mr. Hayes:
I am a second year law student at DePaul University College of Law in Chicago, Illinois and the incoming Editor-in-Chief of DePaul's Business & Commercial Law Journal.
The topic and quality of your blog caught my attention. Would you be willing to post information about the DePaul Business & Commercial Law Journal's upcoming annual symposium on your blog?
This is the sixth annual symposium we are hosting with the support of the Commercial Law League of America. This year's topic is Lawyers, Law Firms, & the Legal Profession: An Ethical View of the Business of Law. We have a number of wonderful speakers joining us, so I am trying to get the word out about this great event!
I attached a description to this e-mail so you can learn more about the event. This is the Commercial Law League of America's website, which also has information about the event.
I would greatly appreciate your support! Please let me know if I can answer any questions for you.