The bankruptcy filing by United Airlines' parent, UAL Corp., will reorder the usual corporate relationships among management, labor and vendors, as well as introduce some new players.
Here's a who's who of United's reorganization:
Eugene R. Wedoff, the chief U.S. Bankruptcy Court judge in Chicago, was already handling the bankruptcy of a controversial gaming company when he won the judicial jackpot Monday: the once-in-a-career UAL Corp. case.
When Wedoff, who is already handling the high-profile bankruptcy of Emerald Casino Inc., was appointed to the bankruptcy bench 15 years ago, the former partner at Jenner & Block was better known as a civil litigator than a bankruptcy expert. But in recent years, he has emerged as a national expert on various proposals to change the bankruptcy statutes.
And he has earned that reputation by active participation in various legal and judicial organizations rather than by writing dry scholarly articles.
"He has probably lectured more than anybody else on the bankruptcy reform legislation," said August Pilati, a partner in Chicago-based bankruptcy boutique Gesas, Pilati, Gesas & Golin Ltd.
Wedoff also isn't afraid of using a firm hand, said David Kurtz, a top bankruptcy lawyer who is now a managing director in the restructuring group of investment bank Lazard LLC.
"This is a case that could eat a weak bankruptcy judge alive, and he won't let that happen," Kurtz said.
Because United's workers also own a majority of the firm's stock, they may seek a larger voice in the company's future than would normally be accorded employees.
The pilots, led by Capt. Paul Whiteford, and flight attendants, led by Greg Davidowitch, as well as United's meteorologists and baggage handlers, had already agreed to major wage reductions in an effort to avoid bankruptcy. The mechanics, led by Scotty Ford, had rejected proposed reductions, but had agreed to vote on a new proposal before United's bid for a federal loan guarantee was rejected.
Workers have three representatives on United's board--Stephen Canale, Douglas Ford and Whiteford--and may seek their own spot in the proceeding.
A key early decision to watch will be whether the judge appoints an equity committee to be part of the proceedings, said Douglas Baird, a University of Chicago professor of law.
"In recent years, equity gets wiped out and has no role in bankruptcy," said Baird. "In cases where an equity committee is appointed, shareholders fare better. Not well, but better."
While thousands of vendors will line up to collect debts owed by United, at the head of the line will be those whose debts are secured by the company's airplanes. These include Boeing Capital Corp.; GE Capital Corp.; a German bank, Kreditanstalt fur Wiederaufbau; and others.
Under the right set of circumstances, these creditors could take their planes back after 60 days, but that's unlikely to happen, said Todd Pulvino, assistant professor of finance at Northwestern University's Kellogg School of Management.
"The creditors want to see United keep flying and make a profit--if it can make a profit," said Pulvino. "They don't want to go in and grab Boeing 777s and then try to lease them to someone else because there's not a good market for that."
Management, led by Glenn Tilton, will hold great power in defining United's initial reorganization plan to emerge from bankruptcy, said Pulvino.
Tilton, who became United's chief executive and chairman in September when the specter of insolvency already darkened the airline's executive suites, headed Texaco Inc. last year when it merged to become ChevronTexaco Corp., for whom he became vice chairman.
Although he had no airline experience before taking over United, Tilton is no stranger to troubled enterprises, having served as acting chairman of the energy company Dynegy Inc. before taking the UAL posts.
United's lead bankruptcy attorney, James Sprayregen, keeps up such a furious pace that his trademark--the cellphone earpiece--is rarely out of his ear.
"Jamie works more hours than anybody else in this area, and that's saying a lot because we've got some crazy people," said Steven Towbin, of Chicago-based D'Ancona & Pflaum LLC.
Sprayregen, 43, has emerged as one of the top specialists in corporate restructuring.
A partner at Kirkland & Ellis, United's longtime outside counsel, Sprayregen's clients include Chiquita Brands Inc., which emerged from Chapter 11 in March; privately held Totes-Isotoner Corp., which is restructuring; Zenith Electronics Corp., which restructured in 1999; and Trans World Airlines, which filed for bankruptcy last year.
And among bankruptcy lawyers, Sprayregen has distinguished himself in another way, said Keith Shapiro, a partner in the Chicago office of law firm Greenberg Traurig.
"Unlike the lawyers that you love to hate, nobody has a bad word to say about Jamie," said Shapiro.