Fri Feb 06 09:57:21 EST 2015 American Airlines Inc. United States Industry: Transportation RECENT NEWS: Panelists discuss changes to Bankruptcy Code SkyMall publisher looks to sell online retail business Thu Jan 29 18:15:05 EST 2015 Fri Jan 23 13:45:03 EST 2015 Foer to step down after 17 years leading AAI Virgin awarded two Love Field gates Mon Nov 10 15:10:07 EST 2014 Fri Apr 25 14:40:05 EDT 2014 DOJ rebuts airline merger critics Field Family Associates gets offer for hotel Mon Mar 10 17:30:14 EDT 2014 Fri Feb 14 14:40:08 EST 2014 Antitrust watchdog opposes airline merger settlement Movers & shakers: Feb. 7, 2014 Tue Feb 11 09:20:05 EST 2014 Movers & shakers: Feb. 6, 2014 Wed Feb 05 14:15:05 EST 2014 Thu Feb 06 14:45:08 EST 2014 American announces routes cut from Reagan, LaGuardia Wed Jan 15 16:45:03 EST 2014 US Airways bags a rival, at a high price Avigilon snags VideoIQ for $32 million Fri Jan 10 13:00:10 EST 2014 Fri Jan 03 15:20:02 EST 2014 TABLE OF CONTENTS: COMPANY PROFILE ................................................................................................................................................ PAGE 1 RECENT DEALS ....................................................................................................................................................... PAGE 2 RECENT NEWS ........................................................................................................................................................ PAGE 3 American Airlines Inc. ©Copyright 2015, The Deal. All Rights Reserved. null Page 1 of 21 02/06/2015 Recent Deals COMPANY DEAL ROLE TYPE Lien holder Likely bidder DEAL INDUSTRY Lien Financing American Airlines Inc. Transportation Auction Japan Airlines Corp. Transportation REGION DATE VALUE ($ MIL) Tue Mar 08 00:00:00 EST 2011 Asia Japan Fri Jan 01 00:00:00 EST 2010 1000.0 Thu Aug 02 00:00:00 EDT 2007 250.0 Wed Sep 14 00:00:00 EDT 2005 14352.0 Wed Jan 10 00:00:00 EST 2001 200.0 East Asia United States Likely bidder Auction Midwest Airlines Transportation North America United States - Central Bankruptcy Filing Northwest Airlines Corp. Transportation Great Lakes Midwest United States Lender DIP Financing Transportation North America United States - Central Midwest American Airlines Inc. ©Copyright 2015, The Deal. All Rights Reserved. null Page 2 of 21 02/06/2015 Recent News Panelists discuss changes to Bankruptcy Code by Andrew Hedlund Updated Thu Jan 29 18:15:05 EST 2015 ET The debate Thursday, Jan. 29, at an American Bankruptcy Institute event centered not on whether to alter the Bankruptcy Code but on specific changes of everything from real estate lease rejection timelines to plan voting requirements. Still, the general consensus of the panelists at the New York event — put on by the association of bankruptcy professionals to discuss the recommendations in its recent report on revising Chapter 11 statutes — was that any adjustments to the Code would not be large. Wachtell, Lipton, Rosen & Katz partner Harold S. Novikoff, one of the panelists in an opening discussion, said the Dec. 8 report was not a "teardown" of the Code. The event's moderator, Bill Rochelle of Bloomberg News, later called many of the changes "not radical." University of Maryland Francis King Carey School of Law professor Michelle M. Harner said the special commission formed by the ABI for the report began its three-year process in January 2011 asking if the rules governing bankruptcy even needed updating. As research took place, Harner said the commission members learned small and midsize companies sometimes avoided Chapter 11, which she called a "red flag." By the end of the process, it was clear the Bankruptcy Code could be updated, she said. Part of the discussion dealt with the treatment of executory contracts and leases. A suggestion outlined in the commission's report was extending the period to reject real estate leases from the current seven months to a year. The three panelists discussing the topic — Novikoff, Harner and Seton Hall University School of Law professor Stephen Lubben — emphasized the upside of this potential change for retailers. Novikoff said the commission believed giving companies only 210 days to make decisions on assuming or rejecting real estate leases harms retailers because it does not guarantee the companies will go through a holiday season, which would allow them to see if their tweaks to strategy paid off. "No one is happy with the number of retail liquidations," Harner said. In a recent example, teen retailer Deb Stores Holding LLC on Jan.7 won approval from Judge Kevin Gross of the U.S. Bankruptcy Court for the District of Delaware in Wilmington to liquidate inventory at close to 300 stores. DELiA*s Inc. entered Chapter 11 on Dec. 7 to liquidate as well, and Body Central Corp. (BODY) on Jan. 9 opted to liquidate through an assignment for the benefit of creditors, skipping Chapter 11 altogether. (The report also noted a "common critique of Chapter 11 is that it is too expensive.") Novikoff said the suggested one-year time frame to make a decision on real estate leases was a "fair balance" between the concerns of landlords, who might not want a struggling business in their shopping centers, for example, and companies that want more time to decide on the contracts. A one-year period still would be shorter than the potentially unlimited time frame for lease decisions under the Bankruptcy Code before 2005. Another minor alteration proposed by the commission would change references in the Bankruptcy Code to an examiner to a "more flexible" concept of an estate neutral. Such an individual would retain the duties an examiner performs under the current system but also be given more latitude in dealing with the unique circumstances of a case and the particular needs of a debtor. Jack Butler of Hilco Global, Robert Keach of Bernstein, Shur, Sawyer & Nelson PA and Albert Togut of Togut, Segal & Segal LLP discussed the notion in a second panel. Butler said courts already were appointing individuals that performed the role of an estate neutral, though not necessarily with that express authority. He pointed to Judge Steven Rhodes, who oversaw the municipal bankruptcy of the City of Detroit, Michigan. Butler said Rhodes brought in many different outside opinions and required city leaders, including the mayor, to testify on the plan. Togut said the commission settled on the term "estate neutral" to show it wanted someone with "no bias" and "no preference for an outcome," in the hope the person could "come up with an answer that everyone can embrace and run with." Some recommendations the commission offered, however, did a little more than slightly revamp the Code, namely with respect to small and midsize companies. "This is where we did more than tweak," Butler said. American Airlines Inc. ©Copyright 2015, The Deal. All Rights Reserved. null Page 3 of 21 02/06/2015 Small-business provisions exist in the Bankruptcy Code, but Butler asserted the statutes don't work. The commission's proposals would broaden the reach of the provisions. Costs often present a large problem in smaller cases, he noted. Keach added later that getting financing for smaller businesses can be "harder [than getting financing] for American Airlines Inc." Keach detailed how the commission's proposals tried to make securing debtor-in-possession financing easier while also respecting creditor rights. As an example, he pointed to a recommendation that would allow second-lien creditors to supply postpetition funding but give first-lien creditors a right of first refusal. Another suggestion would put a 60-day moratorium on all debtors executing sales of substantially all their assets following a petition, with certain exceptions. Butler called it a "cooling-off period." Butler, Keach and Togut each noted that sometimes a quick sale would leave parties with a stake in the process out of the negotiating and decision process; Togut pointed to official committees of unsecured creditors as an example. The two-month moratorium would prevent the "shotgun sale of a business," Togut said. "Chapter 11 works best when a consensus is reached," he added. Two other areas in the report with significant changes address cramdowns under Chapter 11 plans and creditor voting procedures. The commission recommended the Bankruptcy Code drop its requirement that one impaired voting class must accept the plan for it to be confirmed — and then crammed down on any classes that rejected the plan. New York University Law School professor Arthur J. Gonzalez, former chief judge of the U.S. Bankruptcy Court for the Southern District of New York, spoke in favor of the change. "It was so easy to get an impaired accepting class," he said. "What does it mean?" The commission in the report asserted the requirement's "potential delay, cost, gamesmanship and value destruction" outweighed its benefits as a threshold for confirmation. Finally, panelists discussed a proposed change that would give one creditor one vote in a particular class, no matter how many claims in the class it and its affiliates held, with some exceptions. James P. Seery of hedge fund River Birch Capital LLC called the change "pro-debtor" and "more democratic." Seery explained that under current bankruptcy law, a creditor can go out and acquire a blocking position or amass enough claims to hinder the debtor from reaching the requirements needed for a creditor class to accept the plan: at least two-thirds in claim amount and one-half in number of claims must vote in favor of the plan. American Airlines Inc. ©Copyright 2015, The Deal. All Rights Reserved. null Page 4 of 21 02/06/2015 Recent News SkyMall publisher looks to sell online retail business by Andrew Hedlund Updated Fri Jan 23 13:45:03 EST 2015 ET In-flight shopping catalog publisher Xhibit Corp. (XBTC) has landed in bankruptcy with hopes of finding a buyer for its SkyMall business. The Phoenix company and seven subsidiaries including SkyMall LLC on Thursday submitted Chapter 11 petitions in the U.S. Bankruptcy for the District of Arizona in Phoenix. Judge Brenda K. Martin is set on Tuesday to consider first-day motions, including requests for joint administration of the cases and for permission to use existing bank accounts, continue insurance coverage and pay prepetition wages. SkyMall would be the lead debtor. In a Friday statement, Xhibit said it sought to sell its SkyMall online retail business as well as substantially all other assets. The debtor's SkyMall magazine is a shopping publication carried on large U.S. flights. CFO and acting CEO Scott Wiley in a declaration Friday said the debtor aimed to hold an auction around March 24 and close a sale the following month, but Xhibit had yet to file a sale motion as of Friday afternoon. The company also did not request use of cash collateral or debtor-in-possession financing. "We are extremely disappointed in [having to file for Chapter 11] and are hopeful that SkyMall and the iconic 'SkyMall' brand find a home to continue to operate as SkyMall has for the last 25 years," Wiley said in the statement. SkyMall is a retailer founded in 1989 that offers a wide array of merchandise from numerous direct marketers and manufacturers through its catalog and website. SkyMall features more than 25,000 products online, with a subset of those being displayed in the in-flight catalog. In the declaration, Wiley attributed the bankruptcy filing to an evolving retail industry, technology advances that allow potential customers to shop elsewhere, reduced margins, a decline in discretionary income of customers and reduced credit lines from suppliers. Accordingly, Xhibit in early 2014 began looking to refocus SkyMall as an online direct retailer. In the fourth quarter, it sought to obtain additional working capital to fund employee payments, but it failed to attract a debt or equity investment. On Jan. 9, it retained financial adviser CohnReznick Capital Market Securities LLC to explore strategic alternatives including a sale. A week later, Xhibit suspended operation of the SkyMall catalog business, which generated substantially all of the debtors' income, and dismissed 47 of its roughly 150 employees. The bankruptcy filing was preceded by warning signs. In an Oct. 15 financial report filed with the Securities and Exchange Commission, Xhibit said there was a risk of failing to continue as a going concern beyond Dec. 31. Auditor Farber Hass Hurley LLP on Sept. 9 raised substantial doubt about Xhibit's ability to continue operations, citing "significant losses from operations" and financial resources that were not sufficient to fund planned operations. In addition, the company's contract with Delta Air Lines Inc. (DAL) was terminated on Aug. 29, so the SkyMall catalog was no longer carried on Delta flights starting Nov. 30. A Dec. 16 SEC filing shows Southwest Airlines Co. (LUV) will follow suit on April 1. On Sept. 9, Xhibit sold its interests in SkyMall's loyalty business, SkyMall Ventures LLC, to Connexions Loyalty Inc. for $24 million in cash. Xhibit is also entitled to receive another $3.9 million in cash in future payments, based on SkyMall Ventures' operating profits one year from the closing of the sale. With the sale proceeds, the company repaid the $15.21 million owed on a $17.15 million secured revolving credit facility from SMXE Lending LLC that was set to come due on Jan. 15. As a result of the sale, Xhibit said it believes most of its cash and other assets are unencumbered by liens. Wiley in the declaration said SkyMall's revenue without the loyalty business was $33.7 million in 2013 and about $15.8 million in the nine months ended Sept. 28. Xhibit shares, traded on the OTCQB tier of OTC Markets, were down 14.1%, to 4.51 cents, in light trading Friday. The company listed less than $50,000 in assets and liabilities in its petition. Its only four unsecured creditors are Adcafe LLC (owed American Airlines Inc. ©Copyright 2015, The Deal. All Rights Reserved. null Page 5 of 21 02/06/2015 $88,283), Marketo Inc. ($27,283), Identifyle Inc. ($1,825) and Big Huge Media LLC ($75), all with trade debt claims against the debtor. Xhibit's petition estimated funds would be left to pay off the creditors. SkyMall, meanwhile, listed $1 million to $10 million in assets and $10 million to $50 million in liabilities. Its largest unsecured creditors include Delta ($1.46 million), American Airlines Inc. (AAL) ($1.02 million), US Airways ($613,837), Gemmy Industries Corp. ($549,539) and United Parcel Service of North America Inc. (UPS) ($481,770). Robert Harris, John Harris, Lori Winkelman and Jason Curry of Quarles & Brady LLP are debtor counsel. Robert and John Harris were not available for comment. American Airlines Inc. ©Copyright 2015, The Deal. All Rights Reserved. null Page 6 of 21 02/06/2015 Recent News Foer to step down after 17 years leading AAI by Bill McConnell In Washington Updated Mon Nov 10 15:10:07 EST 2014 ET Albert Foer, founder, president and CEO of the American Antitrust Institute, announced Monday he will step down effective January 2015 after 17 years at the group's helm. The AAI was launched to promote stronger enforcement of antitrust laws. Foer will be succeeded by AAI vice president Diana Moss, who the AAI said was selected from a "pool of prestigious candidates after a national search." The AAI, under Foer's leadership, has often been a lonely voice in antitrust circles for more robust enforcement during the past nearly two decades as even Democratic policymakers have accepted the tenets of the so-called Chicago School that has prevailed since the Reagan era. Regulators have largely accepted the school's notion that merger challenges require more than simple measurements of market-share changes. The idea is most associated with the University of Chicago's law and economics departments and many assert that it promotes deregulation and lighter merger enforcement. Paradoxically, Foer is a graduate of the University of Chicago Law School, where he was an associate law review editor. At the law school he studied under Richard A. Posner and Ronald H. Coase, two leading scholars of the school. Recently, the AAI has been calling on the Department of Justice to block Comcast Corp.'s proposed $45 billion acquisition of Time Warner Cable Inc. and questioning the wisdom of letting Sysco Corp. go through with its pending $8.2 billion proposed acquisition of US Foods Inc. The AAI also opposed the terms under which the DOJ approved U.S. Airways Group Inc.'s $11 billion purchase of American Airlines Inc. last year. Foer started the AAI with assistance from consumer advocate Ralph Nader. Among its early funders was Oracle Corp., which at the time was in dispute with Microsoft Corp. over the operating system giant's competitive practices. Another was online travel booking service Travelocity.com Inc. as it was in disputes with Orbitz Worldwide Inc. Despite the big-name backers, the AAI has operated on small budget and Foer has worked out of his home. AAI board chairman Robert Skitol said Moss "is ideally positioned to build on Bert's powerful 17-year legacy and to take the AAI in new directions over the years ahead." Foer said Moss "has been my trusted right hand for 14 years" and "is a skilled competition advocate with strong connections in the antitrust and regulatory communities and has been instrumental in helping build the AAI into a leading, progressive competition advocacy organization." Moss, an economist, is credited with extending the AAI's competency in several industries that garner major attention from antitrust enforcers, including energy, transportation, agriculture, telecommunications, and healthcare. Foer, who turned 70 this year, will continue with the AAI in a new half-time role focusing on international competition advocacy and competition culture. "We are delighted that Bert has committed to remain a key member of our Management Committee to support Diana and the AAI in advancing our ambitious agenda for 2015 and thereafter," Skitol said. Moss previously served as a senior staff economist at the Federal Energy Regulatory Commission where she coordinated competition analysis for electricity mergers. From 1989 to 1994, she consulted in private practice in the areas of regulation and antitrust at the National Economic Research Associates and consulting firm Putnam, Hayes and Bartlett Inc. She has published articles in a number of economic and legal academic journals, including American Economic Review, Journal of Industrial Organization, the Energy Law Journal, and the Antitrust Bulletin. She is editor of Network Access, Regulation and Antitrust, published in 2005 and is an adjunct faculty member in the Department of Economics at the University of Colorado at Boulder. She holds an M.A. from the University of Denver and a Ph.D. from the Colorado School of Mines. She lives in Colorado and will split her time between there and Washington. Foer's career has included private law practice in the Washington offices of Hogan & Hartson LLP and Jackson & Campbell PC. He also served as assistant director and acting deputy director of the Federal Trade Commission's Bureau of Competition. For 12 years he was also CEO of his family's chain of retail jewelry stores. He has published extensively on competition policy and is editor of the Next Antitrust Agenda and co-editor of the International Handbook on Private Enforcement of Competition Law and of Private Enforcement of Antitrust Law in the United States. In addition to his law degree from the University of Chicago, he also earned an A.B. (magna cum laude) from Brandeis University and an M.A. in political science from Washington University. American Airlines Inc. ©Copyright 2015, The Deal. All Rights Reserved. null Page 7 of 21 02/06/2015 American Airlines Inc. ©Copyright 2015, The Deal. All Rights Reserved. null Page 8 of 21 02/06/2015 Recent News Virgin awarded two Love Field gates by Lou Whiteman Updated Fri Apr 25 14:40:05 EDT 2014 ET Virgin America Inc. said Friday that the airline has been selected by the U.S. Department of Justice to acquire two gates at Dallas' Love Field being divested as part of the settlement that allowed the parent of American Airlines Inc. to merge with US Airways Group Inc. American and U.S. Air combined in December to create American Airlines Group Inc., but to secure antitrust approval for the deal the companies were required to give up operations in Dallas, Washington, D.C. and New York, among other cities. San Francisco-based Virgin America said it would use the Love Field gates to offer service to Washington and New York along with San Francisco and Los Angeles. Virgin America had been vying with Love Field market leader Southwest Airlines Co. and Delta Air Lines Inc. for the Dallas gates, and neither regulators nor other airlines on Friday confirmed Virgin had been selected. Virgin America officials at a press event Friday said that the gate award was subject to approval by the city of Dallas and other conditions it described as routine. — Lou Whiteman American Airlines Inc. ©Copyright 2015, The Deal. All Rights Reserved. null Page 9 of 21 02/06/2015 Recent News DOJ rebuts airline merger critics by Bill McConnell In Washington Updated Mon Mar 10 17:30:14 EDT 2014 ET The Department of Justice is urging a federal judge to disregard critics of an agency settlement with US Airways Group Inc. that allowed the carrier's $11 billion takeover of American Airlines Inc. to win antitrust approval. The DOJ's Antitrust Division on Monday filed its response to more than a dozen comments filed with the U.S. District Court in Washington regarding the November 2013 settlement that obligated US Airways to give up all of American's 104 air carrier slots at Reagan National Airport in Washington, 34 slots at LaGuardia International in New York City, as well as gates at Boston Logan International, Chicago O'Hare International, Dallas Love Field, Los Angeles International and Miami International to mitigate harm the DOJ said that the merger would otherwise cause to flying consumers. The divested assets must be sold to low-cost carriers such as Southwest Airlines Co., JetBlue Airways Inc. and others. The DOJ countered complaints from several parties that the settlement failed to address the harm caused by reducing the number of major domestic airlines from five to four and the number of "legacy airlines" with a truly nationwide footprint from four to three. "The competitive significance of the remedy is reflected in the value being paid for the divested Reagan National and LaGuardia slots — over $425 million — which is unprecedented in the airline industry and among the most substantial merger remedies in any industry," the DOJ said in a filing. The federal Tunney Act requires that DOJ antitrust remedies be vetted in public comments and approved by a federal judge before being finalized. Judge Colleen Kollar-Kotelly is presiding over the review. DOJ characterized the settlement as a "major victory" for consumers in the U.S. because it will enable low-cost carriers to millions of passengers on new routes each year. "It fully addresses the harm that would have resulted from [the merged airlines'] control of nearly 70% of the limited takeoff and landing slots" at Reagan National, the DOJ said. By ensuring that low-cost carriers are able to acquire the otherwise unobtainable slots at Reagan and LaGuardia, the DOJ said the merger addresses the government's primary concern that the merger as it was proposed would have made it easier for the remaining legacy carriers — the merged US Airways/American, United and Delta — to cooperate on the prices and services they offer rather than competing with each other. "The structure of the airline industry was already conducive to coordinated behavior among the legacy carriers," the DOJ said. US Airways tempered the industry's structural flaws by offering discounted "Advantage Fares," for connecting flights that competed with other airlines'. The DOJ argued that post-merger the combined carrier would be less inclined to offer advantage fairs. The American Antitrust Institute, a public advocacy group devoted to strong antitrust enforcement, questioned the long-term benefit of divestitures to Southwest and other low cost carriers. But the DOJ noted that the divestiture of slots at Reagan National and LaGuardia has already begun and the acquirers will begin operating the slots later this year. The process for divesting gates at the remaining airports is expected to occur in the "near future." The divestitures will increase the scope of the low cost carriers' networks and "bring the consumer-friendly policies of the low cost carriers to more travelers across the country," DOJ said. Those policies include Southwest and JetBlue's policies of allowing travelers' first bag to be stowed free of charge as well as overall lower ticket prices. The DOJ again cited the lower fares out of Newark Liberty International Airport when Southwest acquired 36 slots at the New Jersey airport in 2010, evidence of the lower prices ushered in when a low-cost carrier gains flights out of a new airport. The DOJ also dismissed Delta Air Lines' plea for the right to bid on the divested slots. "Delta argues that it should not be precluded" from acquiring divested slots and gates at Reagan National and Dallas Love Field," the Justice Department noted. But Delta's assertion that the low-cost carriers do not offer meaningful service to business travelers and do not provide adequate competition to United, the new American and Delta are wrong, the Department of Justice said. Southwest, for instance, reported that roughly 35% of its passengers are traveling on business. What's more, the legacy carriers are more likely to fly high-volume routes and neglect medium and small communities that low-cost carriers are willing to serve. American Airlines Inc. ©Copyright 2015, The Deal. All Rights Reserved. null Page 10 of 21 02/06/2015 Recent News Field Family Associates gets offer for hotel by Bevin Fletcher Updated Fri Feb 14 14:40:08 EST 2014 ET Field Family Associates LLC is looking to sell its New York hotel for $41 million after winning confirmation of its reorganization plan a second time. After FFA's first plan was confirmed on Oct. 2 the debtor received an offer for its hotel and filed a second amended plan on Jan. 8, according to debtor counsel Lawrence G. McMichael of Dilworth Paxson LLP. "The original plan did not contemplate a sale," McMichael said. "Since then the debtor has received an attractive offer for the acquisition of the hotel." The King of Prussia, Pa., company owns the Hampton Inn at JFK, located at the John F. Kennedy International Airport in New York. Magna Hospitality Group, a Warwick, R.I.-based real estate fund specializing in hotels, offered to purchase the 216-room hotel through its affiliate MHF Properties IV LLC, McMichael said. Despite a desire to sell, the debtor has not executed an asset purchase agreement yet because there is some uncertainty around whether it will be allowed to, according to McMichael. However, he noted that FFA was at a hearing in the U.S. Bankruptcy Court for the Eastern District of Pennsylvania in Philadelphia on Wednesday seeking approval for certain aspects related to the sale. McMichael said the debtor on Wednesday won permission to pay the prospective purchaser an expense reimbursement of $150,000 in connection with the sale, arguing that the small amounts were warranted given the $41 million offer would be enough to repay all creditors in full. It remains unclear what other sale hurdles the debtor has to clear, but the company is required to choose whether it will choose to restructure or sell by two days before the effective date. Judge Stephen Raslavich confirmed Field Family's second amended plan on Jan. 31. McMichael said that an asset purchase agreement would be filed when the potential issues are resolved, and that the debtor is asking to extend the current Feb. 28 effective date deadline until sometime in March. The plan would go effective when the sale closes. Under the modified second amended plan, administrative claims, priority claims ($452,068), secured tax claims ($111,795), general unsecured claims ($809,253), and unsecured claims held by affiliate FHA II LLC ($2.5 million), will be paid in full with cash from sale proceeds on the effective date. Wells Fargo Bank NA, as trustee for holders of a commercial mortgage and note agreement dated Jan. 23, 2007, is the debtor's largest secured creditor. The trustee had asserted a $39.5 million claim but agreed to an allowed claim totaling $31.32 million. In the event of a sale, Magna can choose to either assume the loan and make related payments, or pay Wells Fargo a lump sum of $31.78 million in cash on the effective date. If Magna did not opt for the one-time payment, then it would pay Wells Fargo $100,000 on the effective date, then make interest-only payments for 18 months based on a 20-year amortization scheduled, and then make monthly principal and interest payments until the loan matures on Feb. 1, 2017. Member interests, under the sale option, would receive any funds remaining after all other creditors were paid, in proportion to their ownership interest. FFA will revert to the restructuring plan confirmed in October if the sale does not go through, according to McMichael. Under that plan, filed Aug. 20, all creditors aside from Wells Fargo would receive amortized quarterly payments for four years beginning on the effective date at 1% interest rate per annum. Membership interests would be preserved and New-Penn Management Co. would continue to operate the hotel as a Hampton Inn. Regardless of the sale, on the effective date the debtor will pay Wells Fargo a $309,306 restructuring fee. Wells Fargo's debt would begin to accrue interest at a fixed rate of 5.5% and be paid in the same way described under Magna's assumption option. Both the restructuring and the sale scenario establish an escrow fund to pay for hotel renovations, the establishment of an escrow fund to American Airlines Inc. ©Copyright 2015, The Deal. All Rights Reserved. null Page 11 of 21 02/06/2015 pay for hotel renovations. Magna would deposit $2.5 million for renovations, or the debtor contribute $2 million using funds from a loan provided by affiliate Field Family Trust. Renovations would be completed within one year of the effective date, court documents show. FFA was forced into bankruptcy on July 2, 2012, when creditors Ollie Cherniahivsky & Associates, T&L Cleaning Inc., Kanch USA Inc., Leon's Supply Inc., and Penn Glass Enterprises Ltd., filed an involuntary petition against the hotel owner. An order for relief was entered Sept. 12. The same principals of LaGuardia Associates LP, which owns and operates the LaGuardia Plaza Hotel in New York, own the debtor. Creditors filed an involuntary Chapter 11 petition against LaGuardia Associates on Dec. 6, 2011, and the company's reorganization plan went effective Oct. 9, 2013. McMichael said that LaGuardia Associates had hoped to sell the property but ultimately decided restructuring was a better move. In court documents FFA said it began experiencing financial difficulties and fell behind on obligations relating to its Hampton Inn Franchise agreement. The hotel owner cited low occupancy rates due to the economic recession in 2008 and 2009, as well as the failure to collect a large receivable from American Airlines Inc. when the airline filed for bankruptcy. Despite an involuntary filing, the debtor has worked closely with the creditors committee and Wells Fargo to come to a consensual resolution, McMichael said, so the case is proceeding smoothly and peacefully. He also noted that the hotel is operating as usual and is booked with reservations. Peter C. Hughes and Catherine G. Pappas of Dilsworth Paxson are also debtor counsel. Ashely M. Chan of Hangley Aronchick Segal Pudlin & Schiller represents the creditors committee. Brett D. Anders of Polsinelli Shughart PC is counsel for Wells Fargo. American Airlines Inc. ©Copyright 2015, The Deal. All Rights Reserved. null Page 12 of 21 02/06/2015 Recent News Antitrust watchdog opposes airline merger settlement Updated Tue Feb 11 09:20:05 EST 2014 ET The American Antitrust Institute and a group of consumer groups have filed comments with the Department of Justice calling on the agency to renegotiate or take to trial its case challenging U.S. Airways Group Inc.'s $11 billion purchase of American Airlines Inc. AAI and its allies said a settlement between the DOJ and the airlines announced in November is not in the public interest. The government's settlement allowed the deal to go forward, conditioned upon the divestitures of 104 air carrier slots at Reagan National Airport in Washington D.C., 34 slots at LaGuardia Airport in New York, and two gates at each of five other airports to low cost carriers. AAI's comments were filed as part of the Tunney Act review of the settlement. The law requires that DOJ antitrust settlements be reviewed by a federal judge before being declared final. If the judge determines a settlement is not in the public interest, the settlement may be terminated. AAI said the settlement fails to address the bulk of the anticompetitive effects detailed in the government's complaint, including the harm to the approximately 1,000 highly concentrated city-pair routes that the DOJ said would suffer reduced competition because of the merger. "The government has not explained how divesting slots and gates to low cost carriers, which tend to operate in local markets, will address the problem of increased coordinated effects among the remaining three legacy airlines nationwide," AAI said. "The department's settlement sacrifices the ever-dwindling national legacy-airline competition in favor of improved [low cost carrier] local competition on routes at a handful of airports, a tradeoff that on its face makes no sense for consumers overall, let alone for those who benefited from head-to-head competition," AAI said. — Bill McConnell American Airlines Inc. ©Copyright 2015, The Deal. All Rights Reserved. null Page 13 of 21 02/06/2015 Recent News Movers & shakers: Feb. 7, 2014 Compiled by Baz Hiralal Updated Thu Feb 06 14:45:08 EST 2014 ET Jack Butler, who counseled unsecured creditors in American Airlines Inc.'s reorganization and worked on its $18 billion merger with US Airways Group Inc., has left Skadden, Arps, Slate, Meagher & Flom LLP for Hilco Global. He isn't the only lawyer-turned-Hilco executive. Ben Nortman, executive vice president of Hilco Merchant Resources and managing director of Hilco Consumer Capital, was a Chicago bankruptcy attorney at Jones Day. General counsel Eric Kaup came in from Skadden's Chicago office nine years ago, while assistant general counsel Ian Fredricks arrived from Skadden in 2011. Butler has worked with Hilco for many years and knows its CEO, Jeffrey B. Hecktman. Cory Lipoff, an executive vice president and principal at Hilco Merchant Resources LLC, and the Hilco real estate team of Greg Apter and Neil Aaronson have also worked with Butler over the years. Butler got his start in 1980 at Honigman Miller in Detroit after getting his law degree from the University of Michigan. In January 1982 he went to Detroit's Butzel, Keidan, Simon, Myers & Graham, building his reputation as a restructuring lawyer and then moving to Chicago in 1990 with Skadden, where he helped build its bankruptcy practice. His prominence grew in the industry as he got work on the Delphi Corp., Kmart Corp., US Airways Group and Xerox Corp. restructurings. Landing the American role over several other firms was a big win for Skadden, which usually counsels debtors. Butler joins Hilco as executive vice president, reporting to Hecktman. The liquidator, which own brands such as Polaroid and recently helped fund the 363 process for Hostess Brands Inc., also has its hands in private equity and valuation services. Butler, a founder and past chairman of the Turnaround Management Association, also teaches Sunday school, coaches his four young children's athletic teams and serves in leadership positions with numerous civic and charitable organizations. Nomura Holdings Inc. appointed Mike Ward as head of equity sales, Europe, the Middle East and Africa. Based in London, he will report to Chris Fleming, head of global markets sales, EMEA, who said in a statement, "During the past year, the contribution of equities to overall global market revenues has grown significantly and there are real opportunities for Nomura to increase market share in both cash and derivative products." Ward was a principal at C8 Investments, responsible for sales and marketing. Prior to that, he spent eight years at Bank of America Merrill Lynch, most recently as head of EMEA equity sales. He also worked at Lehman Brothers Holdings Inc. and Deutsche Bank AG. Last month, the firm hired Todd Sandoz as global head of execution services and equity trading, based in London. Sandoz joined Nomura from Credit Suisse Group, where he spent 17 years. Most recently, he was head of global foreign exchange and short-term interest rates trading in London. Before that, he had been co-head of Americas equities, global head of cash equity trading and execution and head of equity derivatives and equity trading, Asia Pacific. Morgan Stanley brought in Shamyl Malik as head of electronic trading for foreign exchange in London. He was head of emerging markets and precious metals electronic trading at Citibank NA, which he joined in 2010. Chevy Chase Trust hired Amy P. Raskin as chief investment officer. Raskin was with AllianceBernstein in New York, where she was senior vice president and director of thematic research, head of U.S. and global growth equity research and chief investment officer of AllianceBernstein Venture Capital Fund. Raskin joined AllianceBernstein in 2000 as an equity analyst and spent 13 years there focused on research and thematic investing. Earlier, she worked as a research analyst and investment banker at Donaldson, Lufkin & Jenrette Inc. and Lehman Brothers Holdings Inc. Private equity firm Castanea Partners enlisted Ron Frasch as an operating partner, focusing on luxury products and services. Frasch was president and chief merchandising officer at Saks Fifth Avenue from 2007 until the sale of the company to Hudson's Bay Co. last year for $2.4 billion. He joined SFA in 2004. Before that, he was president and CEO of luxury goods retailer Bergdorf Goodman, a Neiman Marcus Group Inc. subsidiary. Frasch also worked at GFT USA and Escada USA as president, and president and CEO, respectively, and at Neiman Marcus, where he was senior vice president and general merchandise manager for ready-to-wear, accessories and cosmetics. In a press release, Frasch noted the opportunity to work closely again with Castanea founders Brian Knez and Rob Smith. Knez was vice chairman of the board of Neiman Marcus, where he was also co-CEO (alongside Smith) from 1999 to 2001 and was a member of the board of directors from 1998 until the sale of the company in 2005 to Texas Pacific Group and Warburg Pincus LLC for $5.1 billion. American Airlines Inc. ©Copyright 2015, The Deal. All Rights Reserved. null Page 14 of 21 02/06/2015 Smith had been a member of the Neiman Marcus board since 1997. Foley & Lardner LLP said Jami Gekas joined the firm's intellectual property litigation practice as a partner in its Chicago office. Previously, she was a partner in the IP practice of Edwards Wildman Palmer LLP, counseling startups, e-commerce providers and emerging brands. Mayer Brown LLP hired Julian Ellison as a partner for its antitrust and competition practice in Brussels. Previously, he was a partner in the Brussels office at Ashurst. Clippings from the next column: -- BMO Capital Markets hires Lyle Wilpon as head of U.S. M&A. -- Icahn Enterprises LP appoints Keith Cozza as president and CEO. -- Deutsche Asset & Wealth Management adds Brandt Daniel as a managing director and private banker. -- The Financial Conduct Authority recruits former Goldman, Sachs & Co., managing director James Kelly as an adviser in the wholesale banking and investment management division in its supervision unit. -- Glassdoor Inc. taps Adam C. Spiegel as chief financial officer. American Airlines Inc. ©Copyright 2015, The Deal. All Rights Reserved. null Page 15 of 21 02/06/2015 Recent News Movers & shakers: Feb. 6, 2014 Compiled by Baz Hiralal Updated Wed Feb 05 14:15:05 EST 2014 ET In a return to the intimate dance of merchant banking, several firms have risen in recent years, but none have carried the weight of history like James Lindsey Kempner's move to his great-grandfather's firm to run day-to-day operations. A veteran Lazard banker, "Jamie" Kempner, the great-grandson of banking pillar Carl M. Loeb, joined Loeb Holding Corp. as president. His father, Thomas Kempner, remains as chairman and CEO, a role he has held at the firm and its predecessors since 1979. With the younger Kempner's arrival — and possibly his tome of clients — the privately held investment bank is looking to refocus on its merchant banking roots. It will expand into merger and acquisition advisory in addition to investing. His sweet spot is in transportation and logistics banking and capital markets transactions, while he has covered technology, media and telecommunications and consumer goods. After gaining an MBA from Harvard, he joined Lazard in 1983, becoming a general partner in 1993, and ran the firm's corporate finance department from 1995 to 1998. He was most recently a senior adviser and managing director. Kempner graduated from Yale University, where he met his wife, Cynthia and where his father and his brother, Thomas L. Kempner Jr., attended. Before working at Davidson Kempner Capital Management LLC, from April 1981 to February 1983, Kempner Jr. was a vice president of Loeb Partners, where he traded a bond arbitrage portfolio and headed the firm's money market department. Loeb Holdings can trace its beginnings to 1931, just after the Great Depression, when Carl M. Loeb & Co. was founded by its namesake and son John L. Loeb. A few years later, the firm combined with brokerage Rhoades & Co. and became Loeb, Rhoades & Co., a name it held until 1979 when it was bought by Sandy Weill's Shearson Hayden Stone. It then became Shearson Loeb Rhoades, which, in 1981, American Express Co. bought for $915 million in stock. In 1984, AmEx combined it with Lehman Brothers Kuhn Loeb (which was co-founded in 1867 by Solomon Loeb — yes, a member of the philanthropic family), creating Shearson Lehman/American Express. In 1988, it was combined with E.F. Hutton & Co., becoming Shearson Lehman Hutton Inc. and then Shearson Lehman Brothers in 1990. Now, you may be wondering where Loeb Holding came in; well, in 1982 Loeb Partners Corp. was founded by Thomas L. Kempner as an investment vehicle for the Loeb family and outside investors. Jamie Kempner will have help from managing director Said Armutcuoglu to expand the M&A business. He joined the firm in 2009 and began his career at Lazard in 1992 in the Chicago office, moving to the New York office in 1994. Loeb Holding recently relocated to the 14th floor of Sullivan & Cromwell LLP's headquarters at 125 Broad St. from 61 Broadway. The lease is for 15 years and 10 months. The merchant banking operation will focus on the U.S. and invest $500,000 to $25 million per deal depending on family's and friends' involvement. Capital One Bank appointed David Jacobson as a wealth planner, based in New York. He arrived from UBS Bank, where he specialized in private wealth management. Prior to UBS, he provided wealth planning strategy services for ultra-high-net-worth clients at Deutsche Bank Private Wealth Management. Jacobson also practiced trust and estate law with Carter Ledyard & Milburn LLP in New York. On Jan. 1, 2015, Roger Meltzer and Nigel Knowles will become global co-chairmen of DLA Piper, succeeding Lee I. Miller and Tony Angel. Also, Cameron Rains and Simon Levine will become global co-CEOs of the firm. Rains will replace co-CEO J. Terence O'Malley, while Levine will replace Knowles. Meltzer and Rains will retain their roles as co-chairmen of the Americas. Knowles, managing partner of the international business, will hold that role until April 30, 2015. Levine will remain as co-managing director of groups and services for the international business until Dec. 31. Knowles' and Levine's appointments are subject to approval by members of DLA Piper International LLP. Weil, Gotshal & Manges LLP announced that Adam G. Safwat joined the firm as counsel in Washington. He was most recently deputy chief in the fraud section of the U.S. Department of Justice, criminal division. He joins Weil's white collar defense and investigations practice and will focus on white collar criminal defense, regulatory enforcement matters, and internal investigations. Safwat joins former colleague Steven A. Tyrrell, who was chief of the DOJ's fraud section. Tyrrell is managing partner of the Washington office and head of the white collar defense and investigations practice. Jones Day said of counsel Philippe Goutay and associate Anselme Mialon will join its financial institutions litigation and regulation practice in Paris. They hail from Freshfields Bruckhaus Deringer's Paris office, where Goutay led the financial services practice. Eva Davis joined Winston & Strawn LLP from Kirkland & Ellis LLP as chairwoman of West Coast private equity, based in Los American Airlines Inc. ©Copyright 2015, The Deal. All Rights Reserved. null Page 16 of 21 02/06/2015 Angeles. Davis was the founding partner of Kirkland's Los Angeles corporate department, where she practiced for 15 years. Allen & Overy LLP launched an office in Barcelona with the addition of Antoni "Toni" Valverde. He joins from Freshfields Bruckhaus Deringer and focuses on private mergers and acquisitions. Labor and employment lawyers Zach Fasman, Allan Bloom and Erika Collins joined Proskauer Rose LLP as partners in New York from Paul Hastings LLP. Clippings from the next column: -- Jack Butler, who counseled unsecured creditors in American Airlines Inc.'s reorganization and worked on its $18 billion merger with US Airways Group Inc., leaves Skadden, Arps, Slate, Meagher & Flom LLP for Hilco Global. -- Nomura Holdings Inc. appoints Mike Ward as head of equity sales, EMEA. -- Morgan Stanley taps Shamyl Malik as head of electronic trading for foreign exchange in London. -- Chevy Chase Trust hires Amy P. Raskin as chief investment officer. -- Castanea Partners enlists Ron Frasch as an operating partner, focusing on luxury products and services. American Airlines Inc. ©Copyright 2015, The Deal. All Rights Reserved. null Page 17 of 21 02/06/2015 Recent News American announces routes cut from Reagan, LaGuardia Updated Wed Jan 15 16:45:03 EST 2014 ET American Airlines Group Inc. Wednesday announced that it plans to eliminate nonstop service to 20 cities from Washington Reagan National (DCA) and New York LaGuardia airports as a result of network changes necessitated by the slot and gate divestitures mandated by the Department of Justice as part of federal antitrust approval of the US Airways Group Inc.'s $11 billion takeover of bankrupt AMR Corp., the parent of American Airlines Inc. The combined company, since renamed, said it plans to eliminate year-round, daily nonstop service to 17 destinations from Reagan National: Augusta, Ga.; Detroit; Fayetteville, N.C.; Fort Walton Beach, Fla.; Islip, N.Y.; Jacksonville, N.C.; Little Rock, Ark.; Minneapolis; Montreal; Myrtle Beach, S.C.; Nassau, Bahamas; Omaha; Pensacola, Fla.; San Diego; Savannah, Ga.; Tallahassee, Fla. and Wilmington, N.C. Effective dates for the changes at DCA will be announced after the sale of slots and related assets is finalized in the coming weeks, American said. The airline did say that flyers in the nation's capital and on the West Coast will benefit from American's plan to add a second daily nonstop between Reagan National and Los Angeles by shifting US Airways' current San Diego flight to Los Angeles. In addition, service to Fort Myers, Fla. ,from Reagan National will change from year-round service to a seasonal schedule. Nonstop service from LaGuardia to Atlanta, Ga., Cleveland and Minneapolis will be eliminated. However, due to the combination of American's and US Airways' networks, the new airline said it will be able to add service from LaGuardia to 10 communities: Charlottesville, Va.; Little Rock; Roanoke, Va.; Dayton, Ohio; Louisville, Ky.; Wilmington; Greensboro, N.C.; Norfolk, Va.; Knoxville, Tenn., and Richmond, Va. Booking for the new routes begins Sunday, Jan. 26, for travel beginning April 1. — Bill McConnell American Airlines Inc. ©Copyright 2015, The Deal. All Rights Reserved. null Page 18 of 21 02/06/2015 Recent News US Airways bags a rival, at a high price by Bill McConnell In Washington Updated Fri Jan 10 13:00:10 EST 2014 ET US Airways Group Inc.'s $11 billion takeover of American Airlines Inc. was one of the industry-altering transactions of 2013. Assuming a federal judge approves the settlement reached between the carriers and the U.S. Department of Justice in November, only three legacy carriers will serve the U.S. with truly nationwide route networks and international capacity. The reduction of four national carriers to three alarmed the DOJ enough that it filed a lawsuit to block the merger in August. The timing and breadth of the lawsuit caught executives for the carriers and their lawyers off guard. They had expected the department's Antitrust Division to use the same city-to-city analysis that allowed the mergers of United's UAL Corp. and Continental Airlines Inc. in 2010 as well as Delta Airlines Inc. and Northwest Airlines Corp. in 2008 to go through with a few concessions. In the American deal, US Airways anticipated that it would have to divest some slots at Ronald Reagan Washington National Airport and perhaps among another dozen or so city pairs across the country. Instead, prompted in part by the consolidation brought on by those two previous mergers, the DOJ applied an antitrust analysis more akin to the national network framework the agency used in its successful effort to block AT&T Inc.'s attempt to acquire T-Mobile USA Inc. in 2011. The DOJ declared that the takeover of American and its bankrupt parent AMR Corp. would lead to a loss of competition for more than 1,000 routes. To antitrust experts, the sweeping allegation put the airlines in a dilemma — there was no obvious remedy to address such a broad allegation of consumer harm and to many the merger challenge appeared destined for trial before a federal judge. Although US Airways CEO Doug Parker insisted as soon as the DOJ filed its case on Aug. 14 that the government would settle, negotiations over a deal proceeded fruitlessly for more than two months. A trial appeared inevitable until the first week of November, when according to individuals involved in the discussions, the parties finally reached a breakthrough that set the stage for settling the case. According to participants who spoke with The Deal on background, the sticking point was the extent of divestitures at Reagan National. Oddly, it was not the seemingly intractable issue of protecting competition for more than 1,000 routes that would be the hardest issue to resolve, but rather it was the one that appeared easiest to address when the merger was announced. In the end, the DOJ required US Airways to give up all of American's 104 air carrier slots at Reagan National. The merged airline would be allowed to keep slots for commuter flights at the facility but only if it committed to use them for service to small and medium-sized markets. The airlines also agreed to give up 34 slots at LaGuardia International in New York City and gates at Boston Logan International, Chicago O'Hare International, Dallas Love Field, Los Angeles International and Miami International. The DOJ anticipated that all the divested assets would be sold to low-cost carriers like Southwest Airlines Co. and JetBlue Airways Corp. AIRLINE OFFICIALS and sympathetic analysts characterized the settlement as in line with what they expected to give up going into the antitrust discussions but parties on both sides of the talks say the final result, particularly the extent of divestitures at Reagan National, was a far cry from what the airlines anticipated when they announced the deal in February. In fact, it was only at the end of October, with a trial scheduled to begin Thanksgiving week, that there was significant enough progress for the parties to believe a settlement was possible. The turning point appeared to come on Oct. 25 when the DOJ submitted economic analyses prepared by Charles River Associates and other economists to Judge Colleen Kollar-Kotelly of the U.S. Court of Appeals in Washington. The reports showed that after each of the deals carried out by United and Delta capacity went down and prices went up despite predictions by the carriers' to the contrary. The analyses also showed that Reagan National was underutilized because US Airway's and American's slots were being used for smaller planes with capacity of 55 to 70 passengers, thus artificially squeezing capacity. The DOJ also was skeptical of the airlines' claim that by becoming more efficient they would be in a better position to increase service to smaller and midsized airports. Although the government acknowledged that connecting US Airways' domestic network with American's international network made a lot of sense, the regulators worried that the combined airline would have no way to provide a return to shareholders on the merger without hiking prices. The DOJ argued that the cost structure of the new American was going to be a bit higher than either of the airlines on their own. To the extent the merging parties were going to provide shareholder value and pay off bankrupt AMR's creditors, it was only going to be through higher prices and reductions in competition. The DOJ expects low-cost carriers like Southwest and JetBlue will fly Boeing 737s or Airbus 319s and 320s, which typically carry between 100 and 200 passengers, when they acquire the Reagan National slots. That will drive prices down, the DOJ argued, because to fill their bigger planes the discounters and the legacies both will have to price more competitively. American Airlines Inc. ©Copyright 2015, The Deal. All Rights Reserved. null Page 19 of 21 02/06/2015 Although the airlines had asserted since August that the government was presenting a weak case, the economic reports at least did the job of convincing them that the government wasn't going to back down. Talks over settlement terms began in earnest. STILL, THE CARRIERS were taken back by the DOJ's insistence that US Airways give up all of American's air carrier slots at Reagan. They countered with offers to shed 40, then 45 and 60. The DOJ refused the smaller offers and finally the parties agreed to relinquish all 104 American slots. While the back and forth over Reagan National played out the DOJ refused overtures to discuss its terms at other airports. Once the airlines agreed to DOJ's demands at Reagan National, the terms for the other airports were agreed to within 36 hours. Sources close to the airlines said the DOJ staff's interpretation of events is mistaken. They contend that talks toward a settlement were well under way before the reports were submitted and the studies had little impact on the airlines' willingness to settle. The DOJ's contention that Reagan National was under utilized is one the agency had stated before the US Airways-American deal and was well known to the parties. The settlement simply came about when the airlines and the DOJ finally had terms both sides could live with, they said. The DOJ's refusal to discuss the broader terms of the settlement until the number of divested slots at Reagan was agreed upon only delayed reaching a deal. After the DOJ informed the parties that the airlines' initial settlement offer was not sufficient, the airlines contend they weren't given any follow-up guidance on what the DOJ believed was necessary to resolve its concerns. In the end the airlines and many in the antitrust bar question whether the settlement, which is expected to be approved by Kollar-Kotelly this spring, addresses the claims of harm made in the lawsuit. To the airlines, the requirement that the divested assets be sold to discounters as a way of preventing the legacy carriers' gaining increased ability to coordinate on routes and fares is like forcing a square peg into a round hole. To antitrust lawyers outside the negotiations, the DOJ's settlement appeared to be insufficient to address a claim that the merger would harm competition among more than 1,000 routes. The DOJ, however, contends that the settlement addresses substantially all the harms alleged in the complaints. What's more, the agency views the settlement as better than preserving the status quo, which is all that would have been achieved by winning the lawsuit in court. The government said the legacy airlines operate as an oligopoly and have been tacitly coordinating. While that behavior is not illegal, it has raised prices and reduced services for flyers. The DOJ felt it had plenty of evidence from the previous mergers that even a few divestitures to low-cost carriers could make a dramatic difference in the fares and flights available to consumers. When United gave up all its slots at Newark Liberty International Airport in New Jersey as a condition of acquiring Continental, Southwest acquired them, and fares out of the airport lowered dramatically, to some destinations as much as 50%. The number of seats available also increased; to some destinations availability doubled. The DOJ measured the same phenomenon when JetBlue began leasing 8 American slots at Reagan National in 2010. This time around the DOJ expects even more substantial benefit for flyers. Because the divestitures are at key airports that happened to be capacity constrained the added competition will come not only from the point-point flights directly out of those airports but from one-stops that will originate from them too. Chicago O'Hare International Airport, Los Angeles International Airport and New York's LaGuardia Airport are all airports the low-cost carriers want to fly out of but have been denied access. The airlines disagree with the allegations made against their merger and complain they paid a higher price to the government than they feel was warranted. US Airways and American feel they are bearing the brunt for the DOJ's regret over earlier approvals of the United/Continental and Delta/Northwest deals. They say the DOJ is now restructuring the industry, and the last of the legacy carriers to the merger game are paying much of the cost for the whole industry's perceived sins. American Airlines Inc. ©Copyright 2015, The Deal. All Rights Reserved. null Page 20 of 21 02/06/2015 Recent News Avigilon snags VideoIQ for $32 million Updated Fri Jan 03 15:20:02 EST 2014 ET In its latest move to bolster its surveillance capabilities, Vancouver-based Avigilon Corp. has agreed to acquire video analytics company VideoIQ Inc. The digital video surveillance company said on Dec. 31 that it would pay $32 million in cash for VideoIQ. The deal is expected to be completed in early January. "The acquisition will give us sophisticated, commercially proven analytics technology supported by one of the leading analytics development teams in the industry," Avigilon CEO Alexander Fernandes said in a statement. VideoIQ, of Billerica, Mass., provides real-time protection technology to various blue-chip customers including Coca-Cola Co., American Airlines Inc., Toyota Motor Corp. and General Electric Co. Avigilon tapped GMP Securities LP for financial advice on the transaction, while VideoIQ retained Raymond James & Associates Inc. as financial adviser. Avigilon closed a bought deal offering on Nov. 26, gaining total proceeds of about $69 million that it said would be used to back potential acquisitions as well as for other general corporate purposes. It last bought privately-held RedCloud Security Inc., which offers web-based, physical and virtual access control services, for $17 million in cash on May 30. — Sarah Pringle American Airlines Inc. ©Copyright 2015, The Deal. All Rights Reserved. null Page 21 of 21 02/06/2015
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