Originally Posted by
IBE8720
Is the Administrators SOLE aim is the best price or best chance of survival for the company? As someone said, Who are Deloitte working for?
Hypothethically.....
eg:
Bidder A are a group of Investment Bankers. They submit the highest bid as they see more value in the resale value of the company once they break it apart. That is their true motivation.
Bidder B is a Supermarket Chain that wants to buy an airline. They submit a bid $100 million lower. But claim greater industry expertise because they have a former airline CEO involved.
So the Administrator feels/cares that Bidder B have a better chance of survival as a new entity, so recommend to go with the lower bidder.
But the creditors actually get the final vote.
Or a scenario like that is possible?
The Administrator is required to come to a decision based on the interests of ALL creditors - and that includes employees, secured and non secured creditors, leasing Companies, etc.
If Company A in your situation was going to pay $100m more than Company B, but only operate 40 domestic aircraft, versus Company B who were going to pay slightly less but operate more aircraft, and hold on to the WB and VARA - there is a compelling argument that Company B might be in the greater interest of ALL creditors when compared to Company A.
My understanding is that the Administrator will have a recommendation of the preferred bidder - a majority of creditors in both terms of number AND value must approve the sale. Ultimately though, the Administrator has the final say if a consensus can’t be reached by creditors and have the authority to sell the business - although I would imagine if that occurred, the decision would be up for challenge in the courts.
So in summary, it is not necessarily the highest bidder that will be successful.