© 2015 The Texas Lawbook.
By Natalie Posgate
(June 1) – Republic Airways Holdings has reached a long-term agreement with United Airlines that will significantly help pull Republic out of its Chapter 11 bankruptcy, the Indianapolis-based airline recently said in a court filing.
Sidley Austin said today that it represented Chicago-based United’s end of the agreement. Leading the effort was Houston M&A partner Kevin Lewis, who received assistance from Houston M&A associate Atman Shukla and bankruptcy partners in the firm’s Chicago and New York offices.
Lewis represented Houston-based Continental Airlines on numerous transactional matters before it merged with United.
Among other airlines, Republic is in a codeshare – also called flight sharing – agreement with United, which allows Republic to provide flights to United customers in certain regions that United does not offer service to. Through its codeshare agreements, Republic uses the partners’ flight designator codes and service marks through fixed-fee arrangements in which United purchases Republic’s seat capacity and Republic covers all other expenses, according to court filings.
Republic filed for Chapter 11 restructuring in February, citing a pilot shortage among the airline that made it difficult to sustain “reliable performance requirements under the codeshare agreements” with United and other codeshare partners, the Friday filing said. Republic reported a net loss in 2015 of $27 million.
“The comprehensive settlement with United is the result of many months of complex, and at times contentious, negotiations covering numerous issues including the claims asserted by United against the debtors,” Republic wrote in the filing
The financial terms of the Republic-United agreement were not disclosed, but Republic’s bankruptcy court filing said the agreement includes increased rates that United will pay to Republic for codesharing services as well as “amendments to the codeshare agreement which provides very significant tangible and intangible short-term and long-term economic concessions” to Republic, the filing says. The parties also agreed to an unsecured pre-petition $193 million claim for United against Republic.
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