Guest flyersclub Posted April 18, 2003 Share Posted April 18, 2003 Air Canada officials sold stock By KEITH McARTHUR - Globe and Mail Update Air Canada chief Robert Milton and his right-hand man, Calin Rovinescu, sold all their personal shareholdings in the airline for a paltry $21,700, one day after the company filed for bankruptcy protection. The two senior executives said they sold their holdings to avoid a conflict of interest during the airline's restructuring and will donate the proceeds to an Air Canada charity, according to the first report of Air Canada's court-appointed monitor, Ernst & Young Inc. "The monitor was informed that Robert Milton, president and chief executive officer, and Calin Rovinescu, executive vice-president and chief restructuring officer, liquidated their shareholdings in Air Canada soon after trading resumed following the filing under [the Companies' Creditors Arrangement Act] so as to avoid any actual or perceived financial interest during the restructuring phase, while dealing with economic stakeholders who may have conflicting interests," Ernst & Young said in the report. "The monitor was also advised that proceeds from the liquidation of the shares will be donated to Dreams Take Flight, an Air Canada employee-organized charity." The monitor's report also provided an update on Air Canada's cash flow. It said the company is burning through $3-million in cash a day. That's up from the $2-million-a-day figure identified by the company on April 1. Ernst & Young said the outbreak of severe acute respiratory syndrome (SARS) has cost the airline $20-million in revenue. In other developments yesterday, Air Canada asked the court to extend its bankruptcy protection order by two months and reached a deal with Canadian Imperial Bank of Commerce to extend its Aeroplan contract to 2013 in exchange for a $350-million prepayment. Air Canada spokeswoman Laura Cooke said the proceeds from the sale of Mr. Milton's stock were approximately $14,000 and the proceeds from the sale of Mr. Rovinescu's stock were approximately $7,700. "Mr. Milton and Mr. Rovinescu wish to remove any potential — real or perceived — conflict of interest during the restructuring process. Both liquidated their shareholdings at the earliest possible opportunity," Ms. Cooke said. She said both executives have filed insider trading reports. It is widely believed that Air Canada's shares will lose virtually all their value by the time the company emerges from bankruptcy protection. The shares closed up 5 cents or 4 per cent yesterday to close at $1.18 on the Toronto Stock Exchange. On April 2 — the day Mr. Milton and Mr. Rovinescu sold their shares — the stock traded in the range of 69 cents to $1.05. Meanwhile, Air Canada's lawyers filed a motion yesterday asking Mr. Justice James Farley of the Ontario Superior Court to extend his initial bankruptcy protection order for two months — with various small amendments — until June 30. The airline says this extension is necessary for it to proceed with its restructuring efforts and present a plan of compromise, or arrangement, to its creditors. Air Canada has also asked Judge Farley to allow it to be released from its obligations under the Canada Business Corporations Act to hold an annual general meeting by June 30. The airline also revealed that it has reached a deal with Canadian Imperial Bank of Commerce to extend its exclusive Aeroplan contract to 2013 from 2009. In exchange, CIBC will pay more for points and will make an advance payment of $350-million. The deal with CIBC is subject to ratification by Air Canada's monitor and the court. At the same time, lawyers representing Air Canada's frequent fliers said they may ask Judge Farley to block the airline from introducing $75 in new service charges every time a customer books a round-trip ticket. They've filed a motion asking that Air Canada be prevented from altering its contract with point holders while it is under bankruptcy protection. Air Canada recently announced that, beginning this summer, it will charge a $25 booking fee and up to $50 in fuel surcharges for each round-trip ticket. "Our main concern is that the value of the air miles is being depleted and that is not what the Aeroplan members signed up for," said Wayne Leacock, an Orillia, Ont., lawyer representing point holders. "We want to go on record with Judge Farley that some actions have to be taken in order to safeguard the Aeroplan program as it stood prior to April 1." In his April 1 order, Judge Farley ordered Air Canada to "continue to honour all airline tickets and Aeroplan redemptions in the usual and ordinary course of business until further order of this court." The motion filed on behalf of Aeroplan members asks that "ordinary course of business" be defined as the way Aeroplan conducted its business on April 1. William McKenzie, another lawyer working on the file, said that, if Judge Farley accepts the proposed definition, he may ask the judge to rule that Air Canada would not have introduced the new surcharges under the ordinary course of business. Other lawyers are complaining about an unwillingness on the part of Air Canada to provide creditors with relevant information. Richard Jones, a lawyer for the Air Canada Pilots Association, said in an interview that he issued a subpoena to Air Canada's chief financial officer, Rob Peterson, to question him about his affidavit filed on April 1. Mr. Jones said Mr. Peterson was invited to show up yesterday for cross-examination in Toronto, but declined to participate. "There has been no cross-examination of Mr. Peterson. There should have been. That would be standard, absolutely standard," Mr. Jones said yesterday. Apr. 18, 2003. 01:00 AM Link to comment Share on other sites More sharing options...
Seeker Posted April 18, 2003 Share Posted April 18, 2003 Pretty impressive show of integrity! Link to comment Share on other sites More sharing options...
zipped Posted April 18, 2003 Share Posted April 18, 2003 That was a very simple and easy gesture by Milton, so if that is what impresses you, fine. I'm sill looking for pro-active airline manager. Link to comment Share on other sites More sharing options...
Seeker Posted April 18, 2003 Share Posted April 18, 2003 Simple and easy, but not so common. And yes. it does impress me. Link to comment Share on other sites More sharing options...
Guest Airmail Posted April 18, 2003 Share Posted April 18, 2003 Simple? Easy? How is that simple or easy? Have you sold any assets and donated the entire proceeds to charity lately? It takes integrity to do something like that. And true to his nature, he did it quietly without fanfare or a cheque presentation a la Carty. Unlike Carty who made a public gesture of his salary cut, it seems that Milton prefers to quietly make these decisions and not make a public spectacle of these actions. Given the beating he has taken in the media, one would have thought this gesture (which, according to the report, was taken on April 1) could have been made public earlier for its PR value but instead, it came out in a routine report under the CCAA proceeding. A "pro-active airline manager"? Sounds like Milton to me. Link to comment Share on other sites More sharing options...
Guest O. Ring Posted April 19, 2003 Share Posted April 19, 2003 Be careful. They have sold their shares for peanuts which makes them look good to some but, have they made an even sweeter deal like Donald Carty. http://www.stockhouse.ca/news/news.asp?newsid=1638303&tick=AMR Link to comment Share on other sites More sharing options...
Guest GDR Posted April 19, 2003 Share Posted April 19, 2003 You're post is right on the money airmail. I'm still convinced that there is nobody around that is as capable as Milton when it comes to running this company. He may not be perfect, but darn few of us are. Greg Link to comment Share on other sites More sharing options...
Guest flyersclub Posted April 19, 2003 Share Posted April 19, 2003 leaving Carty making 12% of previous salary in the next year, CNN report tonight. Link to comment Share on other sites More sharing options...
Idle Thrust Posted April 19, 2003 Share Posted April 19, 2003 Greg, I still wonder why RM only offered to take his pay cut AFTER the unions agreed to the same. I thought that you led from the front, not behind. "Follow me" is the way you lead, not "After you union folks agree I'll go along". Anecdotal stats show that a majority of the "leaders" in WWI were shot in the back! IT. Link to comment Share on other sites More sharing options...
Idle Thrust Posted April 19, 2003 Share Posted April 19, 2003 Greg, Milton may be a very smart man, but you lead from in front, not from behind. If he had agreed to take the pay cut BEFORE asking the unions to do so (as opposed to saying he would ONLY do it after they did), he might, just might, have exhibited some leadership qualities and achieved some positive results. He's a good man but he his history and recent actions beget no (nada) trust from the ranks. IT. Link to comment Share on other sites More sharing options...
dagger Posted April 19, 2003 Share Posted April 19, 2003 This trust nonsense is way over the top. Let's say you loved your president and he said, "We need to cut wages 20%" Would you all be lining up to give him what he wants? Would Buzz Hargrove? Would Judy Darcy? Come on, quit the malarky. There are no loved airline presidents at unionized except maybe Kelleher, now retired. They have all had their strikes, and each time they have a strike union leaders and union members pontificate about the loss of trust. It's hooey. What employees respect most is success. A profitable airline engenders loyalty, not a money-losing one, no matter how employee-friendly the management. Link to comment Share on other sites More sharing options...
Guest flyersclub Posted April 19, 2003 Share Posted April 19, 2003 benson was respected by all cdn employees. Link to comment Share on other sites More sharing options...
Guest johnboy Posted April 19, 2003 Share Posted April 19, 2003 Dagger it's not so black and white in the corporate world. I refer you to Lou Dobbs comments on CNN Friday evening. he called the actions of AMR and it’s upper management as pure nonsense and heaped a whole lot of praise on the unions for coming to bat at a crucial time. Link to comment Share on other sites More sharing options...
MCDU Posted April 19, 2003 Share Posted April 19, 2003 This trust nonsense is way over the top. You don't know how wrong you are. Link to comment Share on other sites More sharing options...
ChicoChico Posted April 19, 2003 Share Posted April 19, 2003 exactly! I think if we had a sense of trust things might not have gotten this bad. If you go back to the day RM took over it has been a difunctional relationship rather than one of mutual respect and cooperation - I offer their pay protection manoever for example. If you wonder why we're here today trust (or lack of it) plays a big role... Link to comment Share on other sites More sharing options...
Guest GDR Posted April 19, 2003 Share Posted April 19, 2003 Hi Chico You and I obviously feel differently about both RG and RM, but I do have to agree with you on the pay protection issue. I frankly don't understand the logic behind them twisting the interpretation of the contract into something that was obviously never intended by either party to the agreement. Greg Link to comment Share on other sites More sharing options...
ChicoChico Posted April 19, 2003 Share Posted April 19, 2003 Gawd knows I want a functional relationship Greg but the Pay protection grievance is an symptom IMHO of the larger problem and that is the basic lack of trust which can IMHO be attributed to the basic "union busting" attitude of management. Until we find a way for both sides to move towards the middle ground things aren't going to change. You don't have to love (or even like) your CEO or worship the ground they walk on but you damn well better be able to TRUST them. I'm an optomist I think we can build an new AC and a new relationship with management. It will require both sides to modify their lives IMHO..... CCrm Link to comment Share on other sites More sharing options...
ChicoChico Posted April 19, 2003 Share Posted April 19, 2003 Gawd knows I want a functional relationship Greg but the Pay protection grievance is a symptom, IMHO, of the larger problem and that is the basic lack of trust which can (IMHO) be attributed to the normal "Harvard MBA school of union-busting" attitude of senior management. Until we find a way for both sides to move towards the middle ground things aren't going to change. You don't have to love (or even like) your CEO or worship the ground they walk on (IMHO) but you damn well better be able to TRUST them. I'm an optomist I think we can build an new AC and a new relationship with management. It will require both sides to modify their lives IMHO..... CCrm Link to comment Share on other sites More sharing options...
ChicoChico Posted April 19, 2003 Share Posted April 19, 2003 Gawd knows I want a functional relationship Greg but the Pay protection grievance is a symptom, IMHO, of the larger problem and that is the basic lack of trust which can (IMHO) be attributed to the normal "Harvard MBA school of union-busting" attitude of senior management. Until we find a way for both sides to move towards the middle ground things aren't going to change. You don't have to love (or even like) your CEO or worship the ground they walk on (IMHO) but you damn well better be able to TRUST them. I'm an optomist I think we can build a new AC and it will require a new relationship with management. It will also require both sides to modify their attitudes IMHO..... CCrm Link to comment Share on other sites More sharing options...
Frosty Posted April 19, 2003 Share Posted April 19, 2003 Well Said!!!! Link to comment Share on other sites More sharing options...
Guest GDR Posted April 19, 2003 Share Posted April 19, 2003 Hi again Chico We're pretty much singing from the same song book, but as much as I am somewhat incredulous at the way flt ops management has dealt with this pay protection issue I wouldn't decide to distrust them for that alone. There are a lot of basics that are going well. In over 30 years I have always received my pay cheque on time, I've always been treated well by my immediate bosses, (my elderly parents recently needed care while one was in the hospital so they displaced me), I believe that Milton has been honest with us even if it wasn't what we wanted to hear, and so on. To me this pay prtection thing, no matter how inexplicable is an isolated incident and I'm not going to taint all management forever based on this one issue. I'm not saying that you don't have other issues that cause you to feel the way that you do and I am only speaking for myself. I very much agree when you say that both unions and management are going to have to change their approach. I tend to think that it is not just the unions that are treating our present situation, (both pre-CCAA and post-CCAA) as another set of negotiations. All sides are going to have to sit down with the attitude that we are all in this marriage for the long haul and we have to figure out how to make it work. I think a good marriage counsellor would be a good idea. A disinterested third party might be able to see both sides of the issue and re-establish any trust that has been lost in the process. Greg Link to comment Share on other sites More sharing options...
dragon Posted April 20, 2003 Share Posted April 20, 2003 It wasn't the day he took over actually, it was about a month after. Before that, Robert had the most loyal, most passionate, most motivated, cemented and functional group of employees ever assembled in the long history of Air Canada. Has the quality of that relationship not declined somewhat since then?… Link to comment Share on other sites More sharing options...
dragon Posted April 20, 2003 Share Posted April 20, 2003 ” I wouldn't decide to distrust them for that alone.” I don’t think anyone else has either Greg. Case in point, employees across all branches distrust Robert, only pilots are affected with the PP issue. Perhaps not I per se, nonetheless, to dismiss this whole trust thing as a bad case of gas is, IMO, very dangerous as Queen moves to Bishop 4. …. check Link to comment Share on other sites More sharing options...
Guest Aer Nfld Posted April 20, 2003 Share Posted April 20, 2003 Yeah nice gesture this was probably required of them under the CCAA filing. Just like most of them resign from the board to avoid from personally being held accountable for this. It would be interesting to see what names are on this list Link to comment Share on other sites More sharing options...
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