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  • What Recoveries Can American Airlines & Global Aviation Creditors & Equityholders Expect?  [View instapost]
    Missing from many estimates and some what central to American Airlines unsecured creditors recovery is a business method patent number 7840497 (and possibly some of the patent holders other related patents). American Airlines has substantially more to benefit than other airlines from using this bankruptcy remote financing method for their airport special facility bonds. The savings from using the structure come to around a half a billion dollars PV(present value) as the bankruptcy remote allows certain high demand facilities to not depend on the credit of the airline and instead guarantees payment to bond holders using the bankruptcy remote special purpose entity in the event the airline decides to stop making payments while undergoing bankruptcy and assuming that the demand is high enough so that a new terminal lease holder can easily be found to replace the previous. Conservatively this should change over 2 Billion dollars of their junk rated American Airlines private activity bonds into investment grade paper in the lowest municipal interest rate environment in 45 years.

    A related hearing on March 7th in the Southern District of New York Supreme court could bring a ruling to pass motion to dismiss in the following weeks allowing discovery in an Antitrust suit against Citigroup who leads Airline (advisory and/or airline debt underwritting) in the United States and co-defendants JPMorgan Chase and Goldman Sachs. The antitrust suit is being brought by the patent holder of the cost saving structure(s) basically alleging that these coveted high yield tax exempt bonds were not restructured earlier due in no small part to collusion among these major banks.

    Linda Grant Williams v. Citigroup

    I see that you worked at Skadden's corporate restructuring group. At what point does Skadden, the rep for the unsecured in the AMR bankruptcy, inform the unsecured reps of such a structure and potential savings if not provide an up to date relatively detailed analysis? It seems negotiations appear to be taking place, concessions appear to continue to be made and I'm no expert but I would imagine something this material would be addressed before now or maybe it's in some sort of filing that I'm not aware of. What are your thoughts about where to look for an existing or upcoming public filings/documents/disc... or what to expect Skedden to do roughly interms of releasing their analysis to the unsecured in terms of timing and substance?
    Mar 7, 2012. 05:17 AM | Likes Like |Link to Comment
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