Chapter 11: Some Addenda And Afterwords
Your article "A new page for Chapter 11?" (Top of the News, Jan. 25), on the need for bankruptcy reform, is among the best to address the subject. Your concern about delay is particularly well-placed. The median time companies spend in reorganization today--about 18 to 22 months--is more than double the 6- to 9-month median of 20 years ago.
I would like to challenge, however, the oft-repeated charge that the executives who run a company into the ground are allowed to try to save it. Of the chief executives who led the largest publicly held companies to financial disaster in the 1980s, 95% lost their jobs by the end of the Chapter 11 case, according to my research. Management turnover is one aspect of Chapter 11 that is working.
Lynn M. LoPucki
University of Wisconsin Law School
So United Airlines Inc.'s Stephen M. Wolf has written to President Clinton seeking help for the airline industry. But what help has Wolf provided to United's business travelers?
I fly over 60,000 miles annually, most of it cross-country from Los Angeles to the East Coast and almost all of it on United. Last June, when UAL announced its Fair Fares program, I entertained some hope that airline costs for frequent business travelers such as myself might become reasonable and rational. Unfortunately, Fair Fares and similar programs from other carriers died a quick death. Today, the price of a standard coach ticket from Los Angeles to New York or Washington is more than $1,300, almost twice the price for the same ticket six months ago.
The major issue confronting U. S. airlines is not foreign carriers or unfair competition from an airline under Chapter 11 protection. Rather, American Airlines Inc., UAL, and other carriers must offer reasonable and rational pricing to assure a steady flow of customers to fill airplanes.
Kenneth C. Green