Twelve Years of Turbulence: The Inside Story of American Airlines' Battle for Survival by Gary Kennedy

Author:Gary Kennedy [Kennedy, Gary]
Language: eng
Format: epub
ISBN: 9781682614884
Google: IZP2yQEACAAJ
Amazon: 1682614883
Published: 2018-02-06T00:00:00+00:00

Our objective is absolutely to reach consensual deals as quickly as possible. Everything we’re doing is geared towards that. But as you know, if we’re not making progress, the next step that we’ll need to take is to file the 1113 motion. But we don’t have a specific timeline for that.

Although we planned to do everything possible to get voluntary deals, we held little hope that all three unions would accept the changes being proposed by management. John Gross, American’s associate general counsel of labor, understood the importance of the 1113 proceeding to the success of our bankruptcy case. Knowing that, John and I engaged 1113 counsel in the weeks leading up to the bankruptcy filing.

The prosecution of an 1113 case is a narrow specialty. Not many law firms have experienced labor lawyers who litigate these kinds of cases. Fortunately for us, we had just the right guy for the job—Jack Gallagher at the Paul Hastings law firm in Washington, D.C.

Gallagher is well known in bankruptcy circles as the best 1113 man in the business. He was in his 60s at the time and closing in on retirement. Worried that he might not want to take on such a large undertaking, I was thrilled when he agreed to handle our case. Gallagher quickly assembled other members of the firm to assist him. He added Neal Mollen, a bankruptcy specialist, and Scott Flicker, one of the firm’s top litigators, to the team, along with a number of associates and paralegals. I knew we were in great hands, but also knew they faced a monumental task.

An 1113 hearing is equivalent to a trial in a civil court. Gallagher and his team were forced to write lengthy trial briefs, review thousands of pages of documents, interview witnesses, and prepare those witnesses for trial testimony. And here’s the kicker—they had to do everything in triplicate. We intended to file 1113 motions against each of the three unions at the same time, and the evidence was unique to each union. This meant three simultaneous trials in Judge Lane’s courtroom. John Gross threw every available company resource into the project and Gallagher did the same with his resources at the law firm. We all wanted to get into court immediately if negotiations for a consensual deal with the unions failed, but we needed to be fully prepared when it came time to file the motion.

As expected, we made scant progress in contract talks with our unions. In fact, the APA attempted a novel maneuver designed to delay or disrupt the 1113 process. The APA filed a lawsuit in which the union asked Judge Lane to rule that the National Mediation Board retained jurisdiction over contract negotiations. If the lawsuit succeeded and we were forced to revert to the prolonged and complicated negotiating rules under the Railway Labor Act, any hope of a quick resolution under 1113 would be lost.

We filed a motion on March 9, 2012, to dismiss the lawsuit and the APA countered with a request for a summary judgment in its favor.

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