Aviation Bankruptcy

Aviation Representative Experience

The Kaplan and Kirsch team has done a wide variety of work, including:

Represented multiple large airports, including several large hub airports, in almost all airline bankruptcies since 2001. That has included the American Airlines, ATA, Delta, Frontier, Independence, LATAM, Midway, Northwest, TWA, United, US Airways (I & II) and Vanguard Chapter 11 proceedings.

Assisted airports in securing uninterrupted flow of PFCs, post-petition payments and related airport operations.

Represented a consortium of over 20 airports, including several large hubs, with respect to pandemic-related rental car bankruptcy cases, including protecting CFCs collected on behalf of airport sponsors and defending preference claims brought by debtors’ liquidating trustees against multiple airport operators.

Assisted airports in international airline bankruptcy matters that included debtor airlines filing for Chapter 15 protection in the United States.

Advised a large hub airport in matters related to a potential filing under Chapter 9 by the municipality in which the airport was located.

Represented a large hub airport in the workout of an airline lease of terminal finances with special facility, resulting in bonds remaining outstanding and the airline continuing operations at the airport.

Represented several airports in restructuring of fuel farm leases to hub carriers to allow continual fueling operations during airline bankruptcies.

Defended a large hub airport in litigation initiated by bond trustee resulting in bankruptcy-based rejection of special facility lease, which triggered a default in the underlying special facility bonds used to finance construction of hangar complex.

Structured a complex airport management agreement to anticipate bankruptcy-centered issues to maximize airport-operator control and avoid operational disruptions.

Represented major hub airports to obtain ex officio status on an official committee of unsecured creditors and represented airports’ interests on the committee, assisting in analysis and oversight of labor and fleet restructurings of subject airlines.

Pursued claims of a large hub airport in excess of $1 billion related to rejection of use-and-lease agreements.

Structured and negotiated new use agreements with carriers under bankruptcy protection.

Pursued litigation against airlines regarding whether certain agreements are leases or financing arrangements (such as Special Facility Bonds).

Advised airports on airline restructuring, including the propriety of providing short-term incentives to carriers and the potential economic impact of their restructuring on the community.

Utilized Federal Aviation Administration (FAA) based grant assurances in bankruptcy proceedings to protect airport-based interests and address matters such as adjusting rates to avoid future FAA concerns.

Used bankruptcy law, in conjunction with our intimate knowledge of airport agreements and operations and FAA grant assurances, to secure a large financial recovery to mitigate damage resulting from rejection of an airline operating agreement.

Represented a small hub airport in state court and bankruptcy proceedings to evict a tenant in breach of its leasing, fueling and other contractual requirements.

Other Representative Experience

Kaplan Kirsch lawyers have also represented a broad range of clients outside the aviation sector. Our experience regarding bankruptcy proceedings also includes matters concerning railroads and infrastructure, as well as environmental issues that come into play with troubled assets. Other work:

Represented two public-sector clients in connection with involuntary bankruptcy proceedings against a railroad involved in Surface Transportation Board (STB) abandonment proceedings.

Counseled a rail transit operator in negotiating a rail-line use agreement to survive the possible bankruptcy of counterparty railroad.

Advised a state transportation agency and a county in connection with the disposition of assets in bankruptcy of an individual claiming interests in railroad property.

Counseled public entities with varying ownership interests in a rail line consisting of abandoned and active segments in connection with the bankruptcy of a third-party rail operator.

Defended a state port in an adversarial proceeding in which a port tenant sought a declaration that the port violated the U.S. Constitution by refusing to negotiate a new lease on terms favorable to the bankrupt tenant.

Represented a state transit agency in bankruptcy court when a commuter-bus operator filed for bankruptcy and sought to hold onto state-owned buses and use its state-awarded contracts to buy its way out of bankruptcy.

Negotiated the assignment of state contracts with a commuter-bus operator and the recovery of the buses owned by the State.

Filed various claims on behalf of a state transit agency in a matter in which vendors filed bankruptcy and failed to account for proceeds from the sale of fare media on consignment.

Represented railroads and other rail-industry parties in rail-reorganization proceedings in both bankruptcy court and related service-preservation proceedings at the STB and its predecessor agency, focusing on ensuring that all parties placed the public interest in preservation of rail service over the interests of creditors and others.

Represented rail shipper in a rail-reorganization proceeding in which bankruptcy trustee and railroad sought to use bankruptcy to eliminate essential service to plants served by the debtor railroad.

Advised public-sector rail transit agency on potential remedies available and procedures to follow in the event of bankruptcy of a contract operator.

Advised infrastructure-fund investors in connection with a bid to acquire the Indiana Toll Road concession out of bankruptcy.

Counseled a potential bidder in connection with the insolvency of the SH 130 toll road concession company in Texas.

Advised a commercial lender in connection with the insolvency of the parent company of the Vista Ridge water pipeline project company in Texas.

Kaplan Kirsch lawyers have provided counsel on the environmental-law implications of bankruptcy proceedings, including as part of the team that worked with the U.S. Treasury in sorting out environmental issues arising from TARP-era arrangements with General Motors. They have also:

Advised a municipality impacted by historical mining-related contamination in preparing its strategy to preserve and pursue potential claims against an insolvent responsible successor party.

Advised a brownfields developer in negotiation of stalking-horse purchase and sale agreement for shuttered Illinois coal-burning power plant site and facilities.

Advised municipal and private clients in acquisition of contaminated property from creditors using deeds in lieu of foreclosure.

Following the bankruptcy of a landfill operator, advised state attorney general’s office and environmental agency on managing financial assurances for post closure of four RCRA hazardous waste landfills.