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American Airlines Bankruptcy

October 4, 2011 by USA Post 

American Airlines BankruptcyAmerican Airlines Bankruptcy, Two icons of American companies have been forced to fend off rumors of impending bankruptcy of the U.S. economy slips closer to what many predict will be a recession.

Price of photography giant Eastman Kodak shares plummeted last week after reports that the company had hired restructuring firm Jones Day as a consultant and that bankruptcy was one option the company was examining.

Kodak’s shares – which has not made a profit since 2004 – was reduced from US2.38 and September 23 to 78c at Friday’s close.

However, the shares recovered ground during the night, rising over 72% and of 1.34 after a company spokesman issued a strong denial of the talk of bankruptcy.

“Of course, to reiterate that we have plans to declare bankruptcy and are committed to meet our obligations,” he says.

“In fact, as you know, we made a coupon payment of the debt today. We can not comment on what others choose to do.”

But the social price of the company is still 69% lower than at the beginning of the year, Reuters reports suggested that the creditors of the company – they have to U.S. & 1.5 billion dollars of debt Kodak – are talking with strategic advice and may try to form a committee to promote a change in the company.

With estimates suggesting that Kodak is burning through more than US600 million in cash and one year is called the company to start selling assets, including its valuable patents, which means that the speculation will continue.

“It’s hard to see how, even if they do restructure its debt, which can operate as a going concern, given the amount of free cash flow are burning through this year,” said Fitch Ratingsanlyst John Witt Reuters .

American Airlines parent AMR Corporation is the other form of being beaten by rumors of bankruptcy.

Stock price fell as much as 40% of the last night before recovering to end the 33% AT $ US1.98 – the first time that the stock has traded below US2 and since March 2003.

The Wall Street Journal said the company had been beaten by a number of factors, including continued warnings about the state of the global aviation industry and a report showing U.S. air travel and freight movements have been reduced.

But worst of all were theanlysts call the company to seek bankruptcy protection as a way to reduce costs.

Airlines, Morningstaranlyst Basili Aluko was the one who makes the call and drew an “abnormal” number of pilot retirements over the past two months, with drivers trying to sell shares in the company because of fears that would fail.

“There is much speculation that they were trying to sell their shares as fast as he could, before the company is facing more financial problems and bankruptcy,” said Aluko.

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