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Airlines

Industry Overview

Until recently, the airline industry was poised to deliver yet another consecutive year of profitability. Instead, through no fault of their own, the global airline industry has been among the industries hit hardest by the coronavirus pandemic, forcing airlines to cut costs, sell assets, and raise capital. The pandemic has the potential to negatively impact the airline industry for years, depending on the availability of government aid, the pace by which travelers return, how long barriers to international travel remain in place, and many other factors.

How We Can Help

The Togut Firm has worked as counsel or co-counsel to many domestic and international airlines, including LATAM Airlines, Frontier Airlines, and Midwest Airlines, and as co-counsel to the official committee of unsecured creditors of American Airlines. Given our substantial experience in this area, we understand the unique challenges of an airline restructuring.

Our familiarity with the demands of complex reorganizations and our commitment to containing legal costs make our firm especially well-suited for representing struggling companies through difficult times. Keeping our billing rates 25% below market, our firm represents companies that are considering whether to pursue a restructuring, including in or out of Chapter 11. Because we have no retainer clients or institutional relationships, our law firm can act independently in the interests of the debtor and the estate without the conflicts or complications presented by preexisting affiliations with lenders or parties in interest.

Relevant Experience

The Togut Firm has achieved outstanding results in several airline restructurings by providing independent, creative, and efficient client service. Our relevant experience in this area includes:

JPA No. 111 Co. & JPA No. 49 Co.

Counsel to the debtors, two Japanese special purpose vehicles that each owned one Airbus A350-900 aircraft, in their chapter 11 cases commenced with the primary purpose of pursuing a sale process for substantially all of the debtors’ assets pursuant to section 363 of the Bankruptcy Code. The Togut Firm successfully defeated the security agent’s motion to dismiss the cases and assisted the debtors in consumating sale of their assets cash, which provided for the satisfaction and release of all of the debtors’ prepetition secured lenders’ claims, as well as additional cash proceeds to the debtors’ estates. The Togut Firm also obtained confirmation of a chapter 11 plan of reorganization that provided a substantial return to the debtor’s equity holder.

LATAM Airlines

Co-counsel with Cleary Gottlieb to the debtors, Latin America’s leading airline with operating entities based in Argentina, Brazil, Chile, Colombia, Ecuador, and Paraguay. The Togut Firm assisted the debtors and their other professionals in restructuring the debtors’ fleet of more than 330 aircraft and reconciling and resolving claims. The debtors consummated a chapter 11 plan of reorganization in November 2023 that restructured debt of more than $7.5 billion.

Frontier Airlines

Conflicts counsel with Davis Polk to the debtors, a regional airline with more than $100 million in liabilities that sold substantially all of its assets to Republic Airways in a robust bidding and auction process. The Togut Firm led the litigation against Frontier’s credit card processors that were a major driver of the debtors’ reasons to seek protection in Chapter 11.

American Airlines

Co-counsel with Skadden Arps to the official committee of unsecured creditors of American Airlines, which emerged from its Chapter 11 cases as the world’s largest global airline carrier. The Togut Firm:

  • Helped build consensus among the debtors’ creditors to obtain a Chapter 11 plan of reorganization that paid creditors in full, plus interest.
  • Assisted with the settlement of antitrust and other litigation claims, the debtors’ settlement with Citibank related to a co-branded credit card program and multibillion-dollar claims, and the committee’s objection to certain tax claims totaling approximately $425 million.
  • Assisted the committee in the review, analysis, and reconciliation of reclamation claims totaling approximately $40 million and section 503(b)(9) claims seeking approximately $56 million.

Midwest Airlines

Counsel to Midwest in connection with preparing Chapter 11 petitions and first-day motions and pleadings intended to facilitate Midwest’s transition to debtor-in-possession (DIP) status and aid in its reorganization efforts after the September 11, 2001, terrorist attacks resulted in a significant downturn in the airline industry. With active assistance of the Togut Firm, Midwest was able to successfully restructure outside of the formal bankruptcy context by implementing a variety of cost-saving measures.

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