The Fort Worth Star Telegram SkyTalk blog has a story about a bond analyst blasting the American Airlines management for their latest request to extend their deadline for presenting a plan for bankruptcy exit.  In her note to investors, Gimme Credit Vicki Bryan said:

“AMR management has been coming off as more arrogant than confident, in our view, with destructive diversions and posturing that almost has boarded on the ridiculous. From CEO Tom Horton’s “revelation” back in July that the merger with US Airways actually was his idea in the first place (oh really? If so, he apparently couldn’t pull it off. See our note on 7/25/12) to the unveiling last week of expensive (and unappealing) corporate rebranding and garish new livery on planes that most likely will be owned by somebody else soon,”

This is what I mean about putting the cart before the horse in this process.  There are way too many attempts to pre-emptively announce developments and changes to control the outcome.  At what point does a board of directors or an unsecured creditor’s committee direct that their inclinations and desires are what controls an outcome rather than the CEO’s desires.  Even if that desire is a multi-million dollar payout if they exit as a stand-alone organization.

And let me ask you this:  Why should multi-million dollar payouts to an executive team take precedence over what is the right outcome for those holding AMR debt?

Filed under: Mergers and Bankruptcy by ajax