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Thomas Roberts laments his lack of roping skills. When he was a young lawyer in Dallas, Roberts participated in rodeos as a hobby; now, the 55-year-old mergers and acquisitions partner at New York’s Weil, Gotshal & Manges says that his riding was good but he had trouble lassoing. Recalls Roberts: “I missed a lot.” True about cattle, perhaps, but not about deals: Last year, representing longtime Weil Gotshal client AMR Corp., Roberts threw a rope around troubled TWA Airlines LLC, pulled it in, and presented it to his client nicely packaged, thanks to an unorthodox use of � 363 of the Bankruptcy Code. The section allows the sale of a bankrupt firm to be conducted by the debtor itself, rather than by the bankruptcy court. It has long been used in deals involving smaller companies, but last year’s $700 million TWA-AMR transaction marked the first time it had been used in a large acquisition. Says Roberts: “This deal brought a level of respectability to the � 363 that wasn’t there before.” Roberts’s involvement with the deal began on New Year’s Eve of 2000. Roberts was in Boca Raton, Fla., vacationing with his family, when he received a call from AMR. Since November, AMR had been negotiating to buy TWA, which had been hemorrhaging money for months. But AMR didn’t want to be bound by TWA’s unfavorable leases and the tough contract concessions TWA had made to its unions. Another sticking point was TWA’s agreement with financier Carl Icahn to sell tickets below cost on lowestfares.com, an Icahn-controlled Web site. “We were looking for a means to acquire [TWA's] assets but to renegotiate leases which were way above market and leave behind the more odious aspects of the company,” says AMR chief financial officer Thomas Horton. The talks were at an impasse. Could Roberts help? The Weil Gotshal partner flew home to New York, and on Jan. 2, he was in Dallas, meeting with Horton and AMR chief executive officer Donald Carty. The situation seemed almost intractable. The men considered letting TWA go bankrupt and then bidding for the company. But that would have left TWA without money for an indefinite period of time, and Carty and Horton were worried about what would happen to TWA if it languished in court for months, unable to operate. Routes would be canceled, customers would be angered, employees would be laid off, and TWA’s historic name would be sullied. What TWA really needed was a loan. But if AMR made the loan, it could easily find itself in bankruptcy court with a long line of other TWA creditors, trying to recover just a fraction of its money. Finally, Roberts hit upon the idea of applying � 363 to the situation. Before moving to New York two years ago to head Weil Gotshal’s corporate practice, Roberts had spent most of his career in Dallas; there, he had worked on much smaller � 363 transactions. But when Roberts approached Carty and Horton with the idea, they were hesitant; they did not want AMR to be tied up in a long bankruptcy hearing. “The first questions they raised were, ‘What happens?’ and ‘How long?’” Roberts says. But the two executives got comfortable with the idea after Roberts explained that the deal would both provide TWA the short-term operating funds that it needed and make TWA a more attractive acquisition target. Horton and Carty signed off on the idea and TWA, left with few options, accepted the proposal on Jan. 9, 2001. The proceedings were transferred to federal bankruptcy court in Wilmington, Del., on Jan. 27, 2001, and Roberts brought in Harvey Miller and Alan Miller from Weil Gotshal’s bankruptcy practice and Greg Danilow and Richard Rothman from its litigation department. James Sprayregen of Chicago’s Kirkland & Ellis represented TWA, and Thomas Biron of Philadelphia’s Blank Rome Comisky & McCauley represented the unsecured creditors. Creditor opposition to the deal softened after it became apparent that TWA would be worthless without some kind of rescue. “The best thing about bankruptcy court is that if the creditors, the debtor, and the buyers all want to do it, it makes it easy for the judge to decide,” Roberts says, laughing. Roberts and the litigators then faced a two-front battle. First, they had to convince judge Peter Walsh to act quickly. Anxious tourists were shunning TWA, and if its financial picture couldn’t be clarified before the crucial summer travel season, the airline would die. Second, they had to prepare to fend off rival bidders. Taking the sale to bankruptcy court put TWA on the auction block. But the threat never fully materialized. Other airlines looked, but none bit. A few investor groups, including one led by Icahn, tried to make bids, but the Weil Gotshal team successfully argued that rival bidders couldn’t demonstrate that they had the wherewithal to pay for the company. The judge agreed and approved the AMR-TWA deal on March 12, 2001. With the bankruptcy proceeding wrapped up, the next challenge was obtaining regulatory approval. Here, the � 363 transaction proved to be a boon. In the airline industry, federal scrutiny is particularly rigorous, given the small number of players. But AMR could now use the “failing company doctrine” — the idea that if a company is going to fail, and the only bidder is another company in the same industry, regulators will look more favorably than usual at the combination. TWA’s bankruptcy filing was clear evidence that it was failing, and the auction had made it apparent no other sustainable bids would materialize. The AMR-TWA combination breezed past regulators and closed by the second week in April, dispelling AMR management’s fears that the case would languish in bankruptcy court. Once the AMR-TWA merger established the � 363 transaction as a viable option for big-ticket M&A deals, it didn’t take long for others to follow suit. When UBS Warburg acquired Enron Corp.’s trading business in Feb. 2002, the transaction was structured as a � 363 deal. Roberts represented Enron in that transaction; UBS Warburg was represented by Washington, D.C.’s Covington & Burling and New York’s Sullivan & Cromwell. Look for more � 363 deals to come — and for Roberts, the erstwhile rodeo rider, to rope in a Texas-sized share of the business.

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