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Taking Flight: From Bankruptcy to The World’s Largest Airline

Corporate Restructuring Group – January 2014 newsletter

The Deloitte CRG Newsletter addresses the current state and outlook for the CRG practice, including recent engagements, announcements, case studies and upcoming events.

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Feature

Taking flight: From bankruptcy to the world’s largest airline

On December 9th, 741 days after it filed for Bankruptcy, American Airlines Group emerged as the world's largest airline, combining the legacy American Airlines and U.S. Airways carriers. Deloitte Financial Advisory Services' Corporate Restructuring Group (Deloitte CRG) began working with American Airlines prior to its bankruptcy filing in late 2011, and was by its side all the way to the ringing of the NASDAQ bell, signifying the commencement of the mega-carrier's new ticker symbol (AAL). In what was described by American’s management as "tremendous," "above and beyond," and "critical to the success of AA's emergence and merger," Deloitte CRG's efforts encompassed work-streams to prepare for the bankruptcy filing, develop vendor management protocols, maintain operational continuity with suppliers, establish cash flow management controls, assist with supplier contract negotiations, resolve pre-petition claims, and calculate complex effective-date distributions constituting more than $500 million in cash and 84 million shares of preferred equity in the new entity.

The work is being led by Anthony Jackson, John Little, and Tony Sasso of Deloitte CRG, and supplemented by personnel from other service areas within Deloitte FAS, such as Analytics, as well Deloitte Consulting and Deloitte Tax. Additionally, the collaborative approach that Deloitte CRG engaged in with Rothschild, Weil, Gotshal & Manges LLP, Winstead PC, Debevoise & Plimpton LLP, Garden City Group, and American Airlines management proved to be a critical driver in such a complex case that saw a merger, bankruptcy emergence, and settlement with the Department of Justice consummated nearly simultaneously.

This cornerstone project, where the Deloitte CRG team spent the greater part of the last two years in Fort Worth and Tulsa, demonstrated the breadth of services (operational, administrative, and transactional) that Deloitte CRG can provide to companies in crisis. While the "new American" will be defined in the skies, Deloitte CRG can claim its own stake in the foundational efforts that culminated on the ground.

Deloitte CRG's work with the new American will continue as the company integrates the carriers, settles on legacy liabilities, and continues to distribute to creditors.

Featured engagements

Deloitte CRG’s featured engagements this month include work with the following selection of clients: food processing company, consumer and commercial merchandiser and a movie studio. For an in-depth look at Deloitte CRG’s recent engagements, check out featured engagements.

As used in this document, 'Deloitte' means Deloitte LLP [and its subsidiaries]. Please see www.deloitte.com/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.

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