NWA chief sold shares just before bankruptcy

[paineinthearse]

A post in GDP - "Frist sold shares in family's hospital corporation just before value fell" - http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=132&topic_id=2103955&mesg_id=2103955 - reminded me of this article in yesterday's Detroit Free Press.

This article was referred to by Rep. Candice Miller (see "Rep. Candice Miller (R-Michigan) is ripping NW Airlines CEO a new one!" - http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=159x4125 - in the Michigan forum)

http://www.freep.com/money/business/nwa20e_20050920.htm

NWA chief sold shares just before bankruptcy
BY JEWEL GOPWANI
FREE PRESS BUSINESS WRITER

September 20, 2005

Less than a month before Northwest Airlines Corp. filed for bankruptcy, its chairman sold nearly a third of his remaining shares. The trading, disclosed in regulatory filings Monday, marks another wave of share sales by Gary Wilson. Northwest's stock price, which closed at 84 cents Monday, was worth more than $5 when Wilson sold 258,100 shares of his 904,940 shares in the Eagan, Minn.-based airline. Northwest spokesman Bill Mellon said the sales were a "personal decision by Mr. Wilson."

Wilson has been selling his stock since the spring. At the beginning of May, Wilson owned 4.3 million shares. That dwindled to 1.3 million by mid June, and as of the last filing Aug. 25, stood at 646,840 shares. Between Aug. 18 and 25, Wilson sold his shares at prices ranging from $5.07 to $5.84. Taking the average of those two prices of $5.45, Wilson stands to gain a pretax take of $1.4 million by selling those shares.

Northwest's shares, which now trade under the symbol NWACQ, are slated to be delisted on the Nasdaq market and trade over the counter Monday. Separately, the airline disclosed the attorneys it has hired and the legal fees it is slated to pay during its bankruptcy and restructuring. Michigan's most important airline, Northwest carries more than 60% of traffic at Detroit Metro Airport, and nearly 80% when counting its commuter carriers.

Northwest filed for Chapter 11 bankruptcy protection Wednesday, ending months of speculation that high jet fuel prices and few concessions from its unions would lead the financially troubled carrier to bankruptcy court. Northwest has hired 11 firms, including law firms and financial and restructuring consultants and advisers, to deal with issues such as antitrust, labor and pension law. Its bankruptcy attorneys are from New York-based Cadwalader, Wickersham & Taft LLP. Northwest has paid the firm $5.6 million during the last year and its rates range from $140 an hour for legal assistants to $800 an hour for a partner's time.

<snip>

Contact JEWEL GOPWANI at 313-223-4550 or [e-mail].

[okieinpain]

1. Jail, jail, jail, jail, jail. if they can send martha, this fool shouldn't

even need a trial.

[GreenPartyVoter]

2. Y'know these people really burn me up. They are sticking someone else

with their problems.

[Bozita]

3. $295/hour for an ASSOCIATE (ATTN: NWA shareholders)

(biting my tongue)

from the article:

Northwest has hired 11 firms, including law firms and financial and restructuring consultants and advisers, to deal with issues such as antitrust, labor and pension law.


Its bankruptcy attorneys are from New York-based Cadwalader, Wickersham & Taft LLP. Northwest has paid the firm $5.6 million during the last year and its rates range from $140 an hour for legal assistants to $800 an hour for a partner's time.


Northwest hired Paul, Hastings, Janofsky & Walker LLP of Los Angeles to handle labor issues. The firm has been working with Northwest for 14 years. A court filing Wednesday notes that Northwest is "one of the most heavily unionized of the major U.S. air carriers," with 38,000 union employees.


Before filing for bankruptcy, the airline paid the firm an initial retainer of $400,000. Its rates range from $295 an hour for associates to $615 for the highest-paid partner working on the case.

[Psephos]

4. Honest question:

NWA's been in intensive care for a long time, and the financial papers have been rife with predictions of its possible bankruptcy since the beginning of the year, or earlier. In other words, its financial state has been public knowledge. That makes this sale different from Martha's, which relied on secret knowledge of a catastrophic FDA ruling.

I'm NOT saying that Wilson isn't a piece of shit for bailing on the stock, so put your flamethrower away. My personal opinion is he can go to hell, and probably will. However, my question (for anyone reading this post) is: if you were an NWA executive, would *you* try to sell any of your stock during the run-up to bankruptcy? Or would you run the risk of the money evaporating? I'm hoping to see a bit of nuance in the response.

Peace.

[Bluebear]

6. State senator calls for CEO/Board to step down

Just for some extra background...
===

Tonight a key state lawmaker is calling for heads to roll at Northwest Airlines. State Senate Majority Whip Steve Murphy wants the entire board of directors to step down now.

Ultimately it was the board that voted to declare bankruptcy, but they remain pretty much in the shadows. Most of the board members are not experts in the aviation industry. Most don't even live in Minnesota, but the bankruptcy buck ultimately stops with them, Northwest Airlines Board of Directors.

Murphy believes the entire board needs to go, after failing to protect the company financially. He believes the board was either out of the loop, or incompetent.

So who are they? Let's start at the top. Chairman Gary Wilson, whose summer stock dump netted him 19.5 million, bought the company 15 years ago with Al Checchi.Before that, Wilson was vice president and C.F.O. of Walt Disney, and he still sits on their board and eight others.

Political connections come in handy with former Michigan governor John Engler and Fred Malek, a former campaign manager for the first President Bush.

But the most influential board member is president and C.E.O. Doug Steenland himself, and Senator Murphy wonders if Steenland was selective with what he told the board. He says it happened to him last April, when Steenland testified at the Capitol and then cashed out his stock a few days later.....



TM and © 2005 KMSP FOX 9., and its related entities

[justgamma]

5. If Shrub can do it and get away with it, why not everyone? n/t