Sunday, May 4, 2014

Another attack on the evil Dan Quale

Ah, since the cold of my last post spring has finally leaped forth..... about a month late.

Damn that Man Made Global Warming.  And the politicial BS has became just so thick it's hard to choose. But one thing doesn't change. That's the attacks by the Left on.... are you ready for this????

Dan Quale. Yes, I kid you not. They are so desperate to change the subject they are picking on Quale.

"As president of the International Brotherhood of Teamsters, I have seen private equity firms plunder company after company, taking rich fees for themselves and cutting costs until there's nothing left to cut. Time and again I've seen their reckless behavior drive companies to declare bankruptcy. When the dust settles, you can count on Wall Street contracts being honored. And you can be pretty sure contracts with workers will be abrogated."

That's non other than Jimmy Hoffa lecturing us about ethics. Wow. I am so impressedd He goes on:

"That's pretty much what's happening with World Airways, a passenger and cargo carrier that sought Chapter 11 bankruptcy protection in November 2013. The airline shut down on March 27, 2014 because it had no money. All employees were fired that day.
World Airways was a profitable company until another private equity firm, MatlinPatterson, came along and loaded it with debt. They collected handsome fees and interest until Cerberus -- run by former Vice President Dan Quayle and former Treasury Secretary John Snow -- threw the airline in the trash along with its employees. Many of the flight attendants and pilots had served their country and company since the Vietnam War."
Actually World Airways served during the war. But I shouldn't be picky. 
But I will be picky about who did what and when. Let's review.

"Global Aviation Holdings Inc. (Global) is the parent company of World Airways, Inc. (World), and North American Airlines, Inc. (North American), headquartered in Peachtree City, Georgia.[1] World and North American are Part 121 U.S.-certified air carriers providing customized air transportation services for major international passenger and cargo carriers, international freight forwarders, the U.S. military, international leisure tour operators, and international corporations. The company entered Chapter 11 bankruptcy on February 15, 2012 and emerged from bankruptcy on Feb. 13, 2013. On Nov. 12 2013 the company announced that it is once again filing for Chapter 11 bankruptcy protection."

 What all of that means is that MatlinPatterson took control on 2/12/12 and dumped it in 11/12/13. Then what happened.

 "World Airways Inc. ceased operations on Thursday after its bankrupt parent was unable to secure necessary funding to keep the charter operator airborne.

 Peachtree City, Ga.-based Global Aviation Holdings Inc., which filed for Chapter 11 protection last November, had attempted for months to raise capital to fund its full reorganization.

 Global, in February, won approval from the U.S. Bankruptcy Court for the District of Delaware to implement a plan support agreement with postpetition lender Cerberus Business Finance LLC. As part of the deal, Cerberus would enter a credit-bid for the debtor's new equity, with Global to solicit competing offers in hopes of creating an auction. But there appeared to have been little interest in the company."


They filed again in 11/13. They couldn’t obtain any financing for operation BUT they did, with the approval of the Court, borrow  money from Cerberus.
When they couldn’t find any interest in the company, Cerberus took whatever assets, including cash in accounts. That  would include health care IF it was company funded. Since the claim is they took it then that appears to be the case.

 So let’s summarize. They went bankrupt. A hedge fund stepped in and kept’em going for about a year until 11/13. They filed again for Chapter 11. No one would but Cerberus would finance them and allow them to remain in operation and look for financing. That failed. Cerberus enforced the contract.
Life is cruel.  Now, what would you want Cerberus to do?? If they had done nothing World would have been out of business in November. They would have been Chapter 7 and all assets, including the cash for company funded health care insurance would have been gone.

Instead Cerberus made a deal. We'll give you a chance to find a White Knight. If you don't we'll take what you would have lost anyway.

(Partially posted in TalkLeft.)

"Unlimited tolerance must lead to the disappearance of tolerance. If we extend unlimited tolerance even to those who are intolerant, if we are not prepared to defend a tolerant society against the onslaught of the intolerant, then the tolerant will be destroyed, and tolerance with them." - Karl Popper

“It’s the presumption that Obama knows how all these industries ought to be operating better than people who have spent their lives in those industries, and a general cockiness going back to before he was president, and the fact that he has no experience whatever in managing anything. Only someone who has never had the responsibility for managing anything could believe he could manage just about everything.” - Thomas Sowell in Reason Magazine