American Airlines Associate General Counsel Kate Hayashi came close to never going to work as a lawyer in the airline industry.
As an associate in Big Law in New York, Hayashi had considered going in-house for a couple of years. When she started seeing large corporate firms laying off associates, she decided to pick up the pace of her inquiries.
In 1992, she saw an ad in the Sunday newspaper by TransWorld Airlines and she applied. Then she did some research on TWA and interviewed with some of its people, and she asked them to remove her from their list of candidates.
A few weeks later, TWA General Counsel Janet Steinmayer called Hayashi.
“You are on speaker phone and everyone who interviewed you is here,” Steinmayer said. “I want to know who you talked to who caused you to decide against working here.”
Hayashi agreed to return for more interviews and she changed her mind.
Twenty-five years later, Hayashi is one of the most experienced and knowledgeable attorneys to ever practice commercial airlines law.
“My first thought when I started at TWA was that no other job in the world can compare, and I think that today,” she said. “You are part of building an entire world for people when they board that aircraft. The air they breathe, the food they eat, the medical emergencies they may face and, most importantly, their safe transport from point A to point B.
“It is a challenging and awesome responsibility,” Hayashi told The Texas Lawbook. “After that insight comes an understanding of the enormous complexity involved with making those things happen. From a professional perspective, I do not believe that any other industry offers the opportunity to grow and gain the broad personal and legal experience that the airline industry offers.
“I have faced enormous challenges but would not change my decision to enter and stay in this industry, because the personal and professional rewards are, in balance, well worth it,” she said.
During her quarter of a century as an in-house counsel with two of the world’s largest airlines, Hayashi has faced many challenges – TWA’s bankruptcy, TWA’s acquisition by American Airlines, the Sept. 11 terrorist attacks that involved two American jetliners, American’s bankruptcy and restructuring and American’s merger with U.S. Airways.
Hayashi said 2020, however, was a year unlike any other. The issues the airlines, including American, faced were unbelievably complex because they involved the health and safety of the airlines’ workers and customers, as well as being a financial threat to the airline industry.
From working with outside companies to obtain cutting edge cleaning products to make it safer on planes for passengers and crew to renegotiating contracts and obtaining billions of dollars in loans and credit facilities, Hayashi has been at the center of American’s response to the Covid-19 pandemic.
“When times get tough in the airline industry, Kate knows how to ground herself,” said Haynes and Boone partner Sakina Rasheed Foster. “Kate’s experience in the industry, resilience and leadership skills have allowed her to play a central role in helping American keep its gears up through the Covid-19 pandemic. She has an innate ability to stay focused on the issue at hand while dealing with a crisis, be it a merger or a pandemic.”
The Association of Corporate Counsel’s DFW Chapter and The Texas Lawbook, citing Hayashi’s tremendous legal work on behalf of American Airlines in 2020, have named her a finalist for the 2020 DFW Outstanding Corporate Counsel Award for Senior Counsel of the Year for a Large Legal Department.
The finalists will be honored and the winners announced at the annual awards ceremony held at the George W. Bush Institute this evening, June 3.
“Under Kate’s leadership, her team played a key role in obtaining a term loan facility that permits American to borrow up to $5.5 billion under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, bolstering the company’s liquidity and mitigating the effect of Covid-19 on its business,” said Foster, who nominated Hayashi for the award.
Foster pointed specifically to American pledging its interests in AAdvantage, the airline’s frequent-flyer program, as collateral for one of the loans under the CARES Act.
“As the team with the most familiarity with the loyalty program, Kate’s group was a pivotal part in the negotiation security for the loan,” she said. “This was uncharted territory for Kate’s team. However, she says that despite enormous challenges, the team joined American’s finance group and outside counsel to achieve approval for the loan in just a few weeks.”
Foster said Hayashi’s group renegotiated and terminated contracts in response to the increase of flight cancellations and dwindling passengers.
“For example, fewer flights meant that the airline needed to amend its contract for fuel delivery,” she said. “The legal department needed to assess potential losses under its contracts and construct creative ways to lessen the company’s cash burn. The team also assisted with projects that would repurpose the airline’s employees and current assets.”
Houston trial lawyer Paul Yetter, who has represented American Airlines in numerous commercial litigation and antitrust disputes, said that while Hayashi has become a great commercial business lawyer, “She’s a litigator at heart.”
“Kate is fearless, which is just as key to negotiating contracts as it is to arguing in a courtroom,” Yetter said. “She and I teamed up on the first cybertrespass trial in Texas some years ago, aiming to protect the airline’s website from software data “screen-scrapers.” She never flinched, despite high stakes, and brought home a win. AA.com is now one of the best airline websites in the world.
“Beyond that she’s a joy to work with – supportive, good-humored, and always expecting the best work from her team,” Yetter said.
Kathleen Hayashi was born in Brooklyn. She lived for 13 years in Brooklyn and then her family moved to Park Ridge, a small town in Bergen County, New Jersey.
Hayashi’s mother was a registered nurse in her hometown of Portland, Maine. Her father was stationed at an Air Force base in Maine, which is where the couple met. He later became an accountant and they moved to New York.
“My dad was president of our block association, a relatively new concept in Brooklyn at the time,” she said. “He got trees planted, combated ‘block-buster’ real estate agents, and pulled our neighborhood together during trying times. We moved to New Jersey after I finished my freshman year in high school.”
Hayashi went to Saint Anselm College in New Hampshire, where she majored in criminal justice and had thoughts of becoming a prosecutor. She received her law degree in 1987 from Rutgers University Law School.
During law school, she changed her career focus.
“I decided I wanted to become a tax attorney. Isn’t that every kid’s dream, to be a tax lawyer?” she said laughing.
Hayashi accepted an offer to practice at Clapp & Eisenberg in New Jersey, where she focused most of her work on the “retention by and formation of bank holding companies and financial workouts during the banking industry crisis.”
In 1993, when she interviewed with TWA at its corporate offices in Mount Kisco, New York, the airline’s deputy GC presented her with a chart of all the work the legal department did.
“He asked me what I would like to cover,” she said. “I was like a kid in a candy store! And then they gave me a tour of Carl Icahn’s offices. There were lots of paintings of horses. It was like I was in a mansion instead of an office. I was young and impressionable, that is all I can say.”
A few years later, Hayashi recalled, she was in a corporate board meeting discussing pension restructuring, and Icahn kept remotely moving the window shades up and down.
At the end of the board meeting, Icahn told Hayashi, “All lawyers should be shot … except you … for now.”
When TWA filed for bankruptcy the second time in 1995, Hayashi relocated to St. Louis and became the airline’s corporate secretary and eventually its general counsel. Six years later, TWA filed for protection under Chapter 11 for the third time and was acquired by American Airlines.
A few months later, then-American Airlines GC Anne McNamara hired Hayashi to be a managing director overseeing the intellectual property of TWA and the TWA integration into American.
“I love the airline industry,” she said. “After three bankruptcies at TWA, I did not want to stay in the restructuring world, and I was excited to work for an airline that actually made money. AA was five times the size of TWA.
“I started at AA in June, ordered a kind of expensive new car and picked it up on Sept. 12, the day after the World Trade Center attack,” she said. “That is how things go in the industry – it can be a rocky road. One day everything looks so bright, and the next … not so much.”
“I have faced enormous challenges but would not change my decision to enter and stay in this industry, because the personal and professional rewards are, in balance, well worth it,” she said.