Case No. 04-13819-SSM.United States Bankruptcy Court, E.D. Virginia, Alexandria Division.
June 24, 2005.
Brian P. Leitch, Esq., Daniel M. Lewis, Esq., Michael J. Canning, Esq., Denis M. Delja, Esq., ARNOLD PORTER LLP, Washington, DC, Counsel to the Debtors and Debtors-in-Possession
Robert Coulter, Esq., Assistant United States Attorney and
Andrea Horowitz Handel, Esq., Brendan Collins, Esq., Washington, D.C. and
Steven J. Reisman, Esq., Daniel R. Lenihan, Esq., CURTIS, MALLET-PREVOST, COLT MOSLE LLP, New York, Attorneys for the ATSB as Government Guarantor of the Tranche A Loan
MILBANK, TWEED, HADLEY MCLOY LLP Wilbur F. Foster, Jr., Esq., Jeffrey K. Milton, Esq., Kenneth Ng, Esq., New York, Attorneys for the Tranche A Lenders
MOORE VAN ALLEN, PLLC, David S. Walls, Esq., David L. Eades, Esq., Stephen E. Gruendel, Esq., Charlotte, N.C. and
SWIDLER BERLIN LLP, Monique D. Almy, Esq., L. Misha Preheim, Esq., Washington, DC, Attorneys for the Collateral Agent, the Agent and Bank of America as a Tranche B Lender
Scott L. Hazan, Esq., Brett H. Miller, Esq., Lorenzo Marinuzzi, Esq., New York, and
VORYS, SATER, SEYMOUR AND PEASE LLP, Malcolm M. Mitchell Jr., Esq., Alexandria, Virginia, Attorneys for the Official Committee of Unsecured Creditors
SECOND STIPULATION AND ORDER MODIFYING SUPPLEMENTAL CASH COLLATERAL ORDER
STEPHEN MITCHELL, Bankruptcy Judge
This matter came on for continued hearing upon the Debtors’ Motion, dated September 12, 2004, for Bridge, Interim and Final Orders (i) Authorizing the Debtors to Use Cash Collateral; (2) Providing Adequate Protection; (3) Scheduling a Final Hearing; (4) Approving Form and Manner of Notice; and (5) Granting Related Relief (the “Motion”), wherein the Debtors moved this Court for, among other things, the entry of bridge, interim, and final orders authorizing the Debtors’ use of Cash Collateral. At the conclusion of the Final Hearing, the Court entered the Final Order,
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permitting the Debtors to use Cash Collateral, subject to the terms of the Final Order, until 11:59 p.m. (New York time) on January 14, 2005. On January 13, 2005, upon the request of the Debtors for an extension and amendment of the terms of the Final Order, the Court entered, after notice and a hearing, the First Supplemental Order (i) Authorizing Debtors’ Use of Cash Collateral and (ii) Providing Adequate Protection Pursuant to Bankruptcy Rules 4001(b) and 4001(d) (as amended or modified, the “Supplemental Cash Collateral Order”). Pursuant to the Supplemental Cash Collateral Order, the Debtors’ authority to use Cash Collateral was extended until 11:59 p.m. (New York time) on June 30, 2005. On March 11, 2005, the Court entered the Stipulation and Order Modifying Supplemental Cash Collateral Order (the “First Stipulation”) in connection with the Debtors’ motion to obtain certain debtor-in-possession financing. All capitalized terms not otherwise defined herein shall have the meanings ascribed to them or incorporated in the Supplemental Cash Collateral Order as modified and amended by the First Stipulation.
The Debtors have requested that the ATSB Lender Parties consent to an extension of the period during which the Debtors are authorized to use Cash Collateral, and the ATSB Lender Parties have agreed thereto, subject to the terms and conditions set forth in this Second Stipulation and Order Modifying Supplemental Cash Collateral (the “Second Stipulation”) and entry thereof by the Court.
Background
A. On September 12, 2004, the Debtors commenced these chapter 11 cases by filing voluntary petitions for relief under chapter 11 of the Bankruptcy Code in the Court.
B. The Debtors have continued in the management and operation of their businesses as debtors in possession pursuant to sections 1107 and 1108 of the Bankruptcy Code.
C. On September 21, 2004, the United States Trustee appointed an official committee of unsecured creditors. No trustee or examiner has been appointed in these Cases.
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D. This Court has jurisdiction, pursuant to 28 U.S.C. §§ 157(b) and 1334, over these Cases, and over the persons and property affected hereby. Consideration of the Motion constitutes a core proceeding as defined in 28 U.S.C. § 157(b)(2).
E. On May 19, 2005, the Debtors entered into that certain Agreement and Plan of Merger (the “Merger Agreement”) with America West Holdings Corporation and America West Airlines, Inc. (collectively, “America West”) which contemplates a merger, through the Debtors’ plan of reorganization, of the Debtors with America West.
F. On June 13, 2005, the Debtors filed a Motion for Order Pursuant to 11 U.S.C. §§ 105(a), 362, 363, 364, 365, 503, 1110
and Fed.R.Bankr.P. 9019 Authorizing the Debtors to Enter into a Master Merger Memorandum of Understanding (the “Merger MOU”) with America West Holdings Corporation, America West Airlines, Inc., and General Electric Capital Corporation, Acting through its Agent GE Commercial Aviation Services, LLC, GE Engine Services, Inc., GE Engine Services — Dallas, LP, and General Electric Company, GE Transportation Component, and their Respective Affiliates.
G. The Debtors’ request for an extension of the period during which they are authorized to use Cash Collateral occurs against the backdrop of the Debtors’ pursuit of the merger with America West, its entry into the Merger Agreement and the Merger MOU, and its attempt to develop financial plans and a plan of reorganization which result in the successful implementation of these transactions. The Debtors have requested the ATSB Lender Parties to consent to a 30-day extension of the Supplemental Cash Collateral Period to accommodate the Debtors’ refinement of its business and reorganization plans, anticipating additional requested extensions of the Supplemental Cash Collateral Period in the future as these plans are further developed.
H. The ATSB Lender Parties have agreed to the 30-day extension of the Supplemental Cash Collateral Period upon the entry of this Second Stipulation modifying the Supplemental Cash Collateral Order in the manner set forth in the decretal paragraphs hereof.
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NOW, based upon the stipulation between the parties and for good cause show, it is hereby:
ORDERED, that the Supplemental Cash Collateral Order will be deemed amended as follows:
(a) The first sentence of decretal Paragraph 2 of the Supplemental Cash Collateral Order is modified to read as follows:
Notwithstanding any provision of the Bankruptcy Code or the Bankruptcy Rules to the contrary, this Supplemental Order shall take effective immediately upon signature and shall remain in effect until 11:59 p.m. (New York time) on July 29, 2005 (such period, plus any extension requested by the Debtors and consented to (in writing) by the ATSB Lender Parties of not more than five business days thereafter, being referred to as the “Supplemental Cash Collateral Period”).
(b) The grid appearing in decretal Paragraph 9(h)(2) of the Supplemental Cash Collateral Order, setting forth amounts for the Debtors’ minimum cumulative Consolidated EBITDAR, is modified to read in its entirety as follows:
Minimum Cumulative Period Consolidated EBITDAR
September, 2004 — December, 2004 ($171,400,000)
October, 2004 — January, 2005 ($192,700,000)
November, 2004 — February, 2005 ($242,900,000)
December, 2004 — March, 2005 ($238,500,000)
January, 2005 — April, 2005 ($ 84,700,000)
February, 2005 — May, 2005 $103,100,000
March, 2005 — June, 2005 $200,000,000
(c) The grid appearing in decretal Paragraph 9(h)(3) of the Supplemental Cash Collateral Order, setting forth amounts for the Debtors’ maximum capital expenditures, is modified to read in its entirety as follows:
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Period Maximum Capital Expenditures
September 1, 2004 — December 31, 2004 $25,000,000
October 1, 2004 — January 31, 2005 $30,000,000
November 1, 2004 — February 28, $32,500,000 2005
December 1, 2004 — March 31, 2005 $32,500,000
January 1, 2005 — April 30, 2005 $32,500,000
February 1, 2005 — May 31, 2005 $32,500,000
March 1, 2005 — June 30, 2005 $32,500,000
(d) Decretal Paragraph 10 of the Supplemental Cash Collateral Order (as amended by the First Stipulation) is further amended by adding, in the appropriate alphabetical order, a new Paragraph 10(t) reading as follows:
(t) (1) either (x) the declaration by any GE Entity of a Merger Event of Default or other default or termination event under the Merger MOU (unless a waiver or forbearance is granted by such GE Entity within ten (10) calendar days with respect thereto), or (y) the exercise of remedies in respect of any such Merger Event of Default or other default, breach or termination event by any GE Entity (unless a waiver or forbearance is granted by any such GE Entity within five (5) business days with respect thereto); (2) the occurrence of any amendment, modification or waiver (without the consent of the ATSB Lender Parties) which, in the context of the Merger MOU, is material (it being understood that any modification or amendment of the Merger MOU changing the amount, timing, currency or other terms of payment by the Debtors under the Merger MOU in a manner materially adverse to the Debtors or their estates shall be deemed to be material); or (3) the Debtors shall fail to deliver written notice to the ATSB Lender Parties of the occurrence of (i) any declaration of a Merger Event of Default or other default or termination event under the Merger MOU or (ii) the exercise of remedies in respect of any Merger Event of Default or other default, breach or termination event by any GE Entity, in either case as soon as possible and in any event not later than (3) business days after the Debtors’ receipt or knowledge thereof. The terms “Merger Event of Default” and GE Entity shall have the meanings ascribed to them in the Merger MOU.
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(e) Exhibit “B” of the Supplemental Cash Collateral Order, setting forth the weekly minimums of Unrestricted Cash required by decretal Paragraph 9(h), is modified to appear in its entirety as indicated on Schedule 1 attached hereto.
ORDERED, that this Court shall retain jurisdiction to hear and determine all matters arising from the implementation of this Order.
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