Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comFirm Insights
Republic Airways files for Chapter 11 Bankruptcy Protection
Author: Joel R. Glucksman
Date: March 31, 2016
Key Contacts
Back
Republic Airways files Chapter 11
Republic Airways Holdings Inc., one of the largest U.S. regional carriers, announced that it had filed for Chapter 11 bankruptcy protection, according to The Wall Street Journal. The company, which holds partnerships with United Airlines, American Airlines and Delta Air Lines, stated in bankruptcy documents that it had fallen under pressure due to pilot shortages and a change in market demand as consumers found cheaper flights with major airlines.
Republic Airways spirals into debt
In its initial bankruptcy filings, Republic Airways cited a collapse in oil prices for its lost revenues. According to The Journal, larger U.S. airlines have generated record profits, which prompted these companies to reduce costs in partnerships with regional carriers. Following a five-year period of financial turbulence where it purchased Midwest Airlines and Frontier Airlines to expand its business, the company became insolvent with a significant drop in demand for regional carriers.
As a result of this precipitous drop in revenues, Republic Airways struggled with a pilot shortage because it could no longer offer competitive salaries. In turn, this led to a lawsuit by Delta Air Lines in which the airline claimed damages due to loss of service.
The company listed $3.56 billion in assets with $2.98 billion in debt in its court filings. Following the news of its bankruptcy petition, Republic Airways’ share price fell by 77 percent to 78 cents.
The restructuring plan
Republic Airways has been in negotiation with its senior creditors and airline partners for close to a year. As it has failed to reach an agreement with key stakeholders and creditors, Republic Airways negotiated a deal with Delta Air Lines to stay the outstanding lawsuit.
Currently, the company plans to maintain operations and pay employees throughout the bankruptcy process.
Are you a creditor in a bankruptcy? Have you been sued by a bankrupt? If you have any questions about your rights, please contact me, Joel Glucksman, at 201-806-3364.
For related articles on airlines dealing with bankruptcy, check out:
- American Airlines’ $388M Bankruptcy Price Tag Approved
- Creditors Try to Force Evergreen International Airlines into Involuntary Chapter 7 Liquidation
- American Airlines Merger Becomes Official
- Practices: Bankruptcy & Creditors' Rights, Corporate Transactions & Business, Bankruptcy Litigation
- Locations: Red Bank, NJ, New York City, Little Falls, NJ
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
IP Infringement: What Steps Can You Take If You're Affected?
IP infringement occurs when someone uses your intellectual property without your permission or beyond the scope of the permission you granted. Common examples of IP infringement include copying a product’s patented features or using a trademarked logo in a way that is likely to confuse consumers about the source or affiliation of goods or services. […]
Author: Michael Mietlicki
Public Allegations, Unfinished Investigation: What New Jersey Businesses Should Do Next
When facing public allegations of wrongdoing, companies should not let the speed of the public conversation dictate the speed of an investigation. An investigation designed to confirm a preferred narrative rather than establish the facts can create serious problems later, particularly if litigation, regulatory scrutiny, or employment claims follow. Key Takeaways When public allegations surface […]
Author: Sean M. Pena
BESS Interconnection: Managing Grid, Cost, and Schedule Risk
For battery energy storage system (BESS) developers, securing equipment and site control is only part of the development equation. A project must also connect to the electric grid, and increasingly, BESS interconnection is one of the biggest sources of schedule, cost, and contractual risk. Key Takeaways This article is Part 3 of our Battery Storage […]
Author: Nicholas Wall
Navigating Director and Officer Liability in Times of Financial Distress
Director and officer liability increases sharply when a company is in financial distress. Decisions that would draw little attention in a healthy business can later be challenged by creditors, shareholders, bankruptcy trustees, and regulators as breaches of fiduciary duty, fraudulent transfers, or oversight failures. Understanding where that exposure comes from, and how to manage it, […]
Author: Michael Mietlicki
Before You Buy: Managing Real Estate and Permitting Risk for BESS Projects in New York and New Jersey
For developers pursuing battery energy storage system (BESS) projects, finding the right property is only the beginning. BESS site selection is as much a legal and transactional exercise as a real estate decision, with risk analysis central to the project’s ultimate success. Key Takeaways The core questions for BESS site selection in New York and […]
Author: Nicholas Wall
What Business Owners Get Wrong Before Meeting a Litigation Attorney
What should you expect when meeting a litigation attorney about a business dispute? You should expect to describe the dispute in your own words, hand over the most important documents, flag any deadlines or immediate threats, and leave with a clearer picture of the problem, what information is still needed, and the likely next steps. […]
Author: Michael Mietlicki
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.