Northwest Arilines offically filed for bankrupcy

[Prius]

Northwest Airlines has filed for bankrupcy today
http://img.lenta.ru/oddly/2004/09/17/dispute/picture.jpg

I don't know many details, all I know is that NWA has filed for bankrupcy.

[henk4]

are you sure that they have not applied for a Chapter 11 treatment?

[Dino Scuderia]

So did Delta...almost within minutes of NWA...that's 4 of 7 major airlines in bankruptcy now. Poor management is a pain isn't it?

[henk4]

So did Delta...almost within minutes of NWA...that's 4 of 7 major airlines in bankruptcy now. Poor management is a pain isn't it?

we flew Delta to Pebble Beach, glad that they lasted just long enough :D

[Matra et Alpine]

So did Delta...almost within minutes of NWA...that's 4 of 7 major airlines in bankruptcy now. Poor management is a pain isn't it?
more about the vagaries of Chapter 11 treatment in the US.

As a company IN Chapter 11 gets preferential treatment then any competitor who can make the legal and financial case for them to be in Chapter 11 as well MUST do so otherwise they will not survive with the higher costs structures they would be stuck with.

The "poor management" in this case is probably those companies who aren't on paper bad enough to get granted Chapter 11 !!!!!

[henk4]

actually Chapter 11 compares to State Support as given to our national carriers, and which under EU regulations are now forbidden (Olympic has been ordered to return 500 mil EU of illegal state support). The problem is also that properly operating companies will have to compete against companies being kept alive artificially. Then the protected companies come out of protection mean and lean and start competing the properly managed companies once again. It would probably be cheaper for the Federal Government to provide the fired company staff with proper social security than keeping the lame ducks flying.

[Matra et Alpine]

well the "stay of creditors" isn't really the government so I'm not sure how the parallel can be drawn. It's about preventing other companies from forcing asset-stripping of the company to pay outstanding debt. Whilst in Chapter 11, they can't do that.

So it's not really "State Support" as the government isnt' GIVING money but is preventing others from taking it :)

[henk4]

well the "stay of creditors" isn't really the government so I'm not sure how the parallel can be drawn. It's about preventing other companies from forcing asset-stripping of the company to pay outstanding debt. Whilst in Chapter 11, they can't do that.

So it's not really "State Support" as the government isnt' GIVING money but is preventing others from taking it :)

are there any softened tax rules under Chapter 11?

[Matra et Alpine]

IIRC I think there are some rules about it, but again that is 'soft' because if the company folds then their is NO tax.
AFAIK the IRS is the same as any other company creditor. So they can't force the company into dissolvency to recover the back-tax.
So it's not really 'giving' money.
But of course that depends on whether it's your nation or the others that is doing it. Look at the debacle over Boeing v Airbus "government assistance" !!!!!

[kennyknoxville]

oh dip