Judges Opinion on Mesa

[RJPilott]

Found on Mesalounge.


"Having considered all the materials submitted, the entire record in this matter, the demeanor and credibility of the testimony of the witnesses, the court will grant a preliminary injuction enjoining Mesa from proceeding with the consent solicitation or exchange offer until this matter can be heard and decided on by its merits. The defendants motion to dismiss will be denied without prejudice. A confirming order will be issued."


"It is more troubling that Mesa has provided such limited disclosure concerning the financial
benefits to Mesa under the United MOU."

"The Court concludes that Atlantic Coast has
demonstrated an antitrust injury with respect to its claim under § 1 of the Sherman Act and D.C. Code
§ 28-4502."

"Mesa had no answer to the Court’s question as to why Atlantic Coast did not have
standing as a potential competitor, even if not as a target, and the Court deems the issue almost
conceded."


"They do not demonstrate why it would be in Mesa’s corporate self-interest to have Atlantic Coast remain a UAX carrier. It would appear more logical for Mesa to try to supplant
Atlantic Coast as a favored UAX carrier than to retain it."


"The Court
concludes that Atlantic Coast has a significant likelihood of success at proving the existence of
concerted action with the effect of restraining a potential competitor."

http://www.atlanticcoast.com/NonFlash/other/other_NF.html

 

[Davi8r]

Good post RJPilott. Looks like the legal profession came through and did the right thing.

 

[belchfire]

maybe there are a few lawers that
don't belong on the bus at the bottom
of the ocean!

 

[PBRstreetgang]

Hey,
People of USofA-1
slimewad-0
PBR

 

[surplus1]

CONGRATULATIONS!

Excellent News.

 

[Always deferred]

Thank you all who have supported us. Its is a great day as for the first time in 2 years we can breathe a collective sigh of relief. Even though the battle is nowhere near over, we at least are afforded the chance to fight on our terms and I promise we are doing all we can to ensure JO keeps his fingers off anything that isn't his. I have said it before - I would much rather go down fighting on my own with my own brother and sister aviators as well as my top mgmt who I could not be more proud to work for then a sleazeball such as JO and the UAL top brASS.
Surplus1, thank you for your support and all your insights and I look forward to continuing to work side by side with you and your company in CVG (for now anyway).
~AD

 

[Heavy Set]

Big surprise that MESA/Orenstein were in cahoots with UAL? Everyone was well aware of what was happening. UAL knew that lack of feed in the short-term and a new long-term LCC competitor in the long-term out of IAD would be detrimental to its comeback. I hope UAL considered the possible consequences of its actions - now it may have some difficulty getting a Gov't guarantee for a large (much needed) loan for exit-financing - whoops....

Great news for Indy Air!!!!!!

 

[RJPilott]

UPDATE (2): DOJ Probe Adds Uncertainty To UAL Bankruptcy

DOW JONES NEWSWIRES

By Elizabeth Souder
Of DOW JONES NEWSWIRES

NEW YORK -- As if UAL Corp.'s (UALAQ) bankruptcy proceedings needed any more uncertainty or complexity, along came the Department of Justice, naming UAL in an antitrust investigation of a hostile takeover for one of United Airline's regional partners.

The companies involved in the case confirmed that the Justice Department is investigating whether Mesa Air Group Inc.'s (MESA) takeover bid for Atlantic Coast Airlines Holdings Inc. (ACAI), a regional airline partner of UAL, violates any antitrust laws. The takeover bid was put on ice late Thursday by the investigation and a court injunction that halts the offer until the legal matters are cleared up.

The merger, once considered a pretty sure bet by experts and investors, now looks like more of a long shot. The reason a change of ownership of one of UAL's partners would make the network carrier more comfortable, rather than less, is that Mesa has agreed to continue operating flights for UAL's United Express service, should Mesa succeed in buying Atlantic Coast.

Atlantic Coast, on the other hand, has said getting out of its contract to fly for UAL will allow the airline to move on to its new strategy of becoming an independent, low-cost airline. Atlantic Coast flies for other major carriers, but to a lesser degree than for UAL.

Atlantic Coast sued Mesa and UAL, complaining the two are working together to eliminate Atlantic Coast as an independent competitor. The investigation and injunction give Atlantic Coast more time to develop its plan to become a low-cost airline, flying out of Washington.

But the delay casts some uncertainty over UAL's bankruptcy emergence. UAL must resolve its differences with Atlantic Coast before it can emerge from federal bankruptcy-court protection. UAL Chief Financial Officer Jake Brace said Friday the airline's business plan is built around a number of assumptions, one of which is the situation with Atlantic Coast. He said the investigation doesn't affect UAL's business plan.

UAL had asked Atlantic Coast, along with other regional partners, to renegotiate its contract in order to cut costs. Atlantic Coast was the only partner to refuse, and asked UAL for a release from the contract.

But then, Mesa offered to buy Atlantic Coast - a move that pleased many Atlantic Coast investors who had bought the shares because Atlantic Coast has been profitable as a regional carrier.

Without Atlantic Coast's service, UAL must find partners who have 50 regional jets to replace Atlantic Coast service. That could take some time, since the popularity among major airlines of using regional jets has soared, and since it takes time to negotiate contracts and train new partners.

Mike Boyd, an airline consultant with The Boyd Group in Colorado, predicted it could take UAL up to nine months to find enough planes to replace Atlantic Coast.

"It could affect UAL's ability to generate revenue," Boyd said.

UAL has said it has a plan to replace Atlantic Coast, should the situation come to that. UAL spokesman Jeff Green said the airline wouldn't have to cut service, but he didn't provide details of the plan.

Mesa, for its part, said it has done nothing illegal in its dealings with UAL. And Mesa said Friday it is considering appealing the injunction that has halted the takeover bid, as well as Mesa's proposal to replace the board of Atlantic Coast. Mesa further said the injunction ruling could prompt the company to sell its Atlantic Coast stake, which amounts to less than 5% of Atlantic Coast.

By selling that stake, Mesa would relinquish a second avenue for influencing the business strategy of Atlantic Coast. Mesa has proposed a new board of directors for Atlantic Coast. Mesa officials have said a new board would consider all strategies for Atlantic Coast and choose the best one.

Atlantic Coast shares closed Friday down 14.9% at $8.89, and Mesa shares closed up 6.4% at $12.90.

(Erik Ahlberg in Chicago contributed to this report.)

 

[C150Heavy]

1. I'm not for the ACA/Mesa deal. I believe it would hurt me in the long run.

2. Having said that, don't get to happy. The 9th circuit court is overturned more than 80% of the time. They are the most liberal court in the US. You people are setting yourselves up for a nasty fall, be careful.

 

[46Driver]

The 9th circuit court is in San Francisco. The US District Court of Appeals is in DC and is the one that ruled on the case.