Like all of you, I woke up this morning to ‘American Airlines Files for Bankruptcy’ splashed all over the papers and news. I am sure this brought a huge wave of panic for those with flights booked on this air carrier but my first thought was what this means for the 130,000 workers and retirees. With our nation’s economy teetering, can we afford to lose 88,000 jobs?
Fortunately as I read on, I discovered that Chapter 11 allows a business to restructure their debts while getting their finances in order so they can remain in business. While American Airlines filed its bankruptcy petition in New York, Arizona bankruptcy law is very similar.Arizona Chapter 11 is primarily used by businesses because it can be expensive and complex, which makes it crucial to seek legal advice from an Arizona Bankruptcy Attorney. American Airlines has 120 days to propose a plan for repayment that is approved by its creditors. Chapter 11 is a lengthy process and can even take a few years.
With Chapter 11, companies are allowed to retain their assets so AA will be able to keep the $4.1 billion in cash it reported in its petition. There are also tax benefits that will help them aggressively manage their liabilities. American and the 88,000 employees plan to operate normally while in bankruptcy which includes an average of 3,000 daily flights.
One bankruptcy rule is ‘don’t wait too long.’ Be proactive when considering filing Chapter 11 in Arizona. Don’t wait until the course is irreversible and seek counsel from an Arizona Bankruptcy Attorney.
