A host of US firms including Weil Gotshal & Manages and Latham & Watkins have won roles on a deal that sees US Airways merge with the bankrupt parent company of American Airlines in an $11bn (£7bn) deal that could create the world’s largest airline.
The deal ends talks which started back in August 2012, soon after Weil leveraged its relationship with American Airlines parent AMR Corporation by winning a lead advisory role on the carrier’s plans to pick a merger partner after it filed for bankruptcy (16 July 2012).
The carrier will operate under the American Airlines name, with 72 per cent of the company owned by AMR stakeholders.
Weil New York partner Tom Roberts and bankruptcy partner Stephen Karotkin led a team for AMR with assistance from the head of Weil’s Dallas office, Glenn West. Former Weil corporate partner Mary Korby, who was advising AMR alongside Roberts in July, has since left the firm for the Dallas office of K&L Gates, where it is understood she is continuing to advise the company.
Other Weil partners working on the merger include New York capital markets partner Corey Chivers, corporate partner Ted Waksman, Houston-based business restructuring and finance partner Alfredo Perez, bankruptcy partner Stephen Youngman, tax partner Stuart Goldring, Michael Kam in executive compensation, litigation partner Richard Rothman and corporate governance partner Holly Gregory.
Debevoise, which previously advised American Airlines on the financing aspects of its aircraft acquisition agreements with Airbus and Boeing in July 2011, has also been acting for AMR, although Weil is taking the lead. Corporate and restructuring partner Jasmine Ball is leading the Debevoise team for the longstanding client and its subsidiary debtors alongside business restructuring and workouts co-chief Richard Hahn and aviation chair John Curry. All three partners are New York-based.
Skadden advised the unsecured creditors committee of AMR in the merger, led by Chicago-based corporate restructuring partner John Butler and New York-based global head of corporate restructuring Jay Goffman.
Meanwhile, Jones Day represented American Airlines as antitrust counsel on the deal, with Washington-based antitrust and competition partners Joe Sims and Bruce McDonald taking the lead. Paul Hastings also advised American Airlines, serving as special counsel with a team that is thought to include Washington-DC based employment of counsel Jack Gallagher.
The smaller US Airways Group turned to Latham & Watkins for advice on the merger, with a deal team led by Silicon Valley corporate partners Pete Kerman, Tony Richmond and Josh Dubofsky alongside New York bankruptcy partners Jan Baker and Paul Harner and Los Angeles bankruptcy partner Robert Klyman. Assistance was provided by a corporate team from Silicon Valley, a bankruptcy team in New York and a tax team led by partner Kirt Switzer in San Francisco. Los Angeles-based benefits and compensation partner James Metz and Houston-based environmental partner Joel Mack were also among the partners to advise.
Washington DC-based Dechert partner Paul Denis led a team serving as antitrust counsel to US Airways, with assistance provided by associates Gorav Jindal and Rani Habash. The Washington office of Cadwalader Wickersham & Taft, which has previously filed an antitrust suit for US Airways, is also understood to be providing antitrust advice to the carrier, while O’Melveny & Myers is understood to be advising on employment issues.
American Airlines CEO Tom Horto said in a statement: “This merger provides enhanced potential for full recovery for our creditors. It is unusual in Chapter 11 cases – and unprecedented in recent airline restructurings – for shareholders to receive meaningful recoveries.”
The transaction is expected to be completed in the third quarter of 2013.
Background to this deal:
US Airways expressed interest in a deal with American Airlines earlier last year. In July, AMR lined up five rivals as potential tie-up candidates, with US Airways, JetBlue Airways, Republic Airways’ Frontier Airlines, Alaska Air Group and Virgin America reportedly making the list.
Weil’s instruction followed its appointment as AMR’s primary bankruptcy counsel in November 2011, with the team on the case led by New York restructuring partner Harvey Miller alongside fellow Manhattan bankruptcy partner Karotkin and Dallas restructuring partner Stephen Youngman.