In re America West Airlines, Inc.
United States Bankruptcy Court for the District of Arizona
166 B.R. 908 (1994)
- Written by Liz Nakamura, JD
Facts
America West Airlines, Inc. (AWA) (debtor) engaged in § 363 sale proceedings as part of a Chapter 11 bankruptcy. AWA was profitable in the three quarters leading up to the § 363 sale and was marketed aggressively to approximately 100 potential buyers in the airline industry. AWA received four initial bids and selected the proposal submitted by AmWest Partners, L.P. (AWP) as the lead plan proposal, meaning that AWP was selected as the stalking-horse bidder for the § 363 sale. AWA moved for approval of a revised interim-procedures agreement for the § 363 sale that would entitle AWP to a breakup fee of up to $8 million if AWA ultimately failed to sell to AWP. The proposed breakup fee would be paid in addition to expense reimbursement. AWA’s creditors objected to the proposed breakup-fee provision.
Rule of Law
Issue
Holding and Reasoning (Mooreman, C.J.)
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