Why do you feel that Air Canada's creditors are reaching the breaking point Matthew? Mark Quoting Matthew Montano <mmontano@xxxxxxxxx>: > Not necessarily true. Most bankruptcy laws protect firms liked United > Airlines from creditors from taking normal recourse for unpaid debts at > the time of filing. (Hence the term "court-protection".) This means > leasing companies can't repossess planes. > > BUT, to receive that protection, the court must be convinced that the > firm has a good chance of exiting bankruptcy before being granted such > protection. This usually means that the firm must file regular updates > with the court, and usually a reorganization plan within a reasonable > time. > > The way it works with most large firms, like GECAS, ILFC, especially in > a climate like this, is that taking a loss any outstanding bills at the > time of bankruptcy protection filing is worth it in order to maintain > ongoing business with the firm. > > Leasing payments, fuel bills etc incurred after bankruptcy filing are > usually paid, though quickly negotiated to lower rates (commonly > retroactively in the case of plane leases.) United can make more money > for GECAS than GECAS can. > > By law, employees are required to be paid. > > This requires significant cooperation from the creditors. But there > sometimes reaches a point where the creditors believe the firm is worth > more dead than alive. I believe Air Canada's creditors are reaching > that point and will soon ask the court to liquidate the airline. (In > the US, it's called a Chapter 7 proceeding.) > > Matthew > > On Monday, September 1, 2003, at 09:29 PM, Alireza Alivandivafa wrote: > > > They will try anything to avoid paying their bills >