If the deal had happened however, I don't think management would have gotten their multi-million dollar payment -- and probably would have earnt a lot less than they are now
After all, in private equity, management only share in the case of a successful exit (and return to the investors)
What would have happened here
- Query if all the debt would have been placed before the meltdown happened potentially making for some interesting discussions with the banks
- Market downturn has significantly impacted the value of parts of the business that were going to be sold to repay debt (eg frequent flyer, terminal, planes). Thus business would be carrying a whole lot more debt than predicted
- Fuel price at over $140 would nat have been considered in the business case, nor the current economic downturn
So at about this point the business would be in real trouble - too much debt and falling earnings. Management would probably be close to getting replaced.
And very unlikely that the business could be refloated any time in the near future to deliver a return sufficient that management would get their bonuses.