A group of bondholders at American Airlines who do not have a seat on the creditors committee in the airline’s bankruptcy say they want a new Board of Directors if the airline emerges as a standalone entity.
A letter detailing their position was posted on the airline’s pilots union website, presumably to help convince the pilots to vote for a new labor agreement that’s been put forward. The idea being that even if they want to spite current management, don’t worry about it, forces are at work to remove management. Doesn’t seem like especially strong forces to me, but whatever brings labor peace at the airline I suppose.
The bondholders’ letter says,
“This letter provides APA with the benefit of a written commitment by the ad hoc group stating it will not agree to a plan of reorganization that does not otherwise include a new independent AMR board of directors and that key stakeholders, including labor, will be a part of that selection process,” the union told its members.
Of course this group doesn’t need to agree to anything, as they have no official voice in the bankruptcy proceeding.
And it can be read many ways, a ‘new’ board could be constituted to the extent only one board member changes. And a new independent board could refer only to a change in outside directors and not management.
So while this story is currently getting a decent amount of play, it really seems there’s nothing here at all.
Update: By trumpeting the commitment from the group of creditors without a current seat at the table, the pilots union signals either (1) that their communications in general are pretty hyperbolic and never credible, or (2) that they’re desperate in this instance. I suspect some element of both to be true. They’re desperate because the last agreement sent to the membership was voted down, with union leadership tossed. The current leadership doesn’t want that to happen to them.
My worry is that they’re not just irrationally desperate, that their desperation is based on their realistic view of the current chances of passage. Though I suspect that the agreement will pass, and would pass without desperate attempts. We can hope, anyway.