Columbus and Phoenix – The recent economic downturn and the meteoric rise in fuel prices has left many US-based airlines, both established legacy carriers and recent startups, in dire financial circumstances.
Several airlines have simply ceased operations, including Aloha, Skybus, ATA, and MAXjet, while Frontier Airlines has sought bankruptcy protection as it attempts to reorganize.
Eos Airlines, a luxury carrier that received rave reviews for its service, also fell prey to rising fuel prices and ailing credit markets. From its inception, through several rounds of financing and its unfortunate descent, Eos Airlines relied on global law firm Squire, Sanders & Dempsey L.L.P. to see it through.
“Squire Sanders’ national platform and diverse pool of experienced lawyers enabled Squire Sanders to assist Eos throughout its existence as a world class airline,” says Tim J. Robinson, lead bankruptcy counsel for Eos. “The early involvement of our restructuring team in the case placed Eos in the best position possible to ease the negative impact on its passengers and employees.”
Squire Sanders has provided regulatory counsel to airlines and those within the aviation industry for more than 25 years through its Washington D.C. practice, while Squire Sanders’ corporate attorneys have advised several airlines through the firm’s Phoenix, Arizona, Columbus, Ohio and Palo Alto, California offices. When the economy turns against airlines, Squire Sanders’ restructuring practice has counseled airlines and creditors committees in many notable bankruptcies and restructurings, including those of America West Airlines, National Airlines, and Mesaba Aviation.
This depth of experience was put to work for Eos Airlines. Squire Sanders advised Eos in obtaining some of the necessary operating certificates before the airline took flight. The firm also advised Eos in raising more than US$214 million in capital through several rounds of financing and provided comprehensive legal counsel on various corporate and labor matters as Eos grew. When Eos ran into financial difficulty, Squire Sanders provided both corporate counsel in efforts to raise additional funds, and restructuring counsel in efforts to seek out alternatives. And when financing fell through at the last minute, Eos turned to Squire Sanders to advise it on obtaining bankruptcy court protection.
“Obviously we would have preferred a successful reorganization and full recovery by the creditors, with interest, as was the case in the Mesaba Aviation reorganization, where we represented the creditors committee,” said Nicholas Brannick, the lead associate on Squire Sanders’ representations on both the Eos and Mesaba matters. Brannick, who previously was an aviation consultant before practicing law, added: “It is unfortunate when a company has a world class product and world class employees and outside forces prevent the company’s success.”
In addition to serving as counsel to Eos Airlines, Squire Sanders was retained as special regulatory counsel by Aloha Airlines in its Chapter 11 case. Squire Sanders also represented the creditors’ committee in the successful reorganization of Mesaba Aviation, Inc., a regional carrier partner of Northwest Airlines, which resulted in creditors receiving full payment, plus interest, on their claims.
Founded in 1890, Squire, Sanders & Dempsey L.L.P. has lawyers in 32 offices in 15 countries around the world. With one of the strongest integrated global platforms and a longstanding one-firm philosophy, Squire Sanders provides sophisticated seamless legal counsel worldwide. Offices in the Americas are located in Cincinnati, Cleveland, Columbus, Houston, Los Angeles, Miami, New York, Palo Alto, Phoenix, San Francisco, Tallahassee, Tampa, Tysons Corner, Washington DC, West Palm Beach, Caracas, Rio de Janeiro, Santo Domingo and São Paulo. In Europe, offices are in Bratislava, Brussels, Budapest, Frankfurt, Kyiv, London, Moscow, Prague and Warsaw. In Asia, offices are in Beijing, Hong Kong, Shanghai and Tokyo. Associated firms include Bucharest, Buenos Aires, Dublin and Santiago.