The Risky Oversight That Almost Cost a Company its Chapter 11 Strategy

OK, uh, just can I give, can you give me one second just for me to to get some, uh, data here to, to better identify, OK. OK. Um, uh, we talked about the chapter 11, uh, that PA is under. So another situation that I found myself, um, we were just, we just, I had just signed an NDA, uh, we didn't, uh, we were not public yet about the Chapter 11 move about the decision of applying for, for Chapter 11. That was April last year. And we, we had this war room uh when we were trying to map all the risks beforehand uh and everything that we would face, uh, for, you know, the first uh weeks that we would go public saying that we were in chapter 11. Um, I was responsible for, uh, in this group, in this four-room group, I was responsible for, for pointing out, uh, the risks, uh, of the, the vice president of clients, which is the vice president vice presidency that I belong to today. So. I, I would try to see, you know, if we, if we, uh, say that we are on the Chapter 11, will my third party provider stop, uh, working for me in airport XXX, and then I will have a bunch of passengers, uh, not flying this kind of stuff. Uh, and I was participating in, in this room and, and mapping the risks, and I think I, I had a pretty, uh, I had, I, I made a pretty good job with the group. Everybody, uh, was contributing, and we came up with this huge map that we, we cross, uh, we, we classified risk according to, you know, the same risk specification of, uh, frequency and, and size of impact, and, uh, we went through all of that and went, and then we went public with the chapter 11. Uh, 2 days before we went public with the Chapter 11, I had a change in a provider in, in the contact center. Contact center is another area there are overview, uh, and we changed one of the biggest providers, uh, of data storage, uh, in contact center. What I didn't know is, uh, and then, uh, we had this new provider, the new provider, uh, we, we mapped all the kind of risks of the transition of a big, a big uh provider could uh affect, but I'm, I, I mapped, uh, Financially, uh, aspect, I, I mapped financial, financial risks, I mapped the operational risks. Uh, what I didn't know is that, is that I had to warn the American judge about this change in, in the provider. I could not just, you know, stop paying one provider and all of a sudden start paying another provider without the judge, uh, knowing it because we have our, our, our, uh, payment, uh, accounts kind of frozen or I would, I, I could only do what the judge knew I was doing and a new provider was something that he didn't know. And I realized that too late. Uh, unfortunately, Uh, the, the, the result was in my learning in that was I, I should have studied a little bit more the Chapter 11, you know, guidelines and be able to to risk other, other things and not the operational risks to passenger or the financial risks of, of not receiving, um, an invoice or something or not paying. I did not have this paying a new, new invoice to a new guy. And what I try

I understand your point that I'm not a lawyer. I'm not supposed to know everything, but I, I, I have to be more vocal about this change in a new provider. Maybe in this work, uh, room, group, if I, if I told him because it was, uh, a, a lot of people from a lot of other areas in MA, if I was really vocal and told them. You know what, we are changing our providing contact center, and I don't know if I have to, to mention that to you guys or not. If I have done that, maybe somebody in the group, the lawyers, for example, they would say, oh, you know what, we cannot do that, we have to work at least write something, put down on paper and go and talk to the judge and say, we are, we are changing this uh huge provider, please let me pay you. Uh, and this, this is something that I didn't do. I didn't know I had, I had to do, but I didn't do. I didn't, I, other people in LATA, the lawyers, they, they don't know the, the day by day situation in contact center, and I did not, uh, tell them. Uh, what happened was I had to renegotiate paying this new provider. So imagine this new provider just came in, he knows that LA is on the Chapter 11, and in his first month, providing services to me, I delayed payment. I could not pay him because I have to. Go and tell the judge and go wander through a process with the judge. I could not change that and have the judge approve, approve me to pay him. So it, it took me a while to pay him and then I had to apologize and renegotiate and everything. But what I did was to make sure. When uh we had the war room group had uh these emails to, after we, we, we were public, we have these emails with warnings circulating in Latam and one thing that I knew is that the cargo people would be changing providers, right? You know, in, in, it would be not one, it would be more because we were not flying passengers, but we were flying a lot of cargo. And so I knew they were Going through some RFPs, I don't know if you're familiar with RFPs. It's the requisition that you put out when you're trying to look for another provider. You have all the SLAs that you want, all the commitments that you want the provider, and all the commercial terms and everything. So I knew they were searching for other providers in cargo, and I knew that they, they didn't know, as I didn't know that they had to talk to the judge before. So what I, I The picture was in this letter that we circulated uh at the end of each day with warnings, you know, in, in, in uh, for a, a larger group of people. I made sure I mentioned my experience changing providers and contact center uh was mentioned. So it was an email that we sent out to a larger group after we went public saying, you know, if you are going through a change of providers, you, you, please, you have to make sure that you go through these steps. Beforehand and we have the approval of the judge and I know that the car after that, the cargo manager talked to me uh and he said uh they were going through 3 other provider changes in cargo and they were able to do the process better than I did. They didn't have to delay payment or, or renegotiate or I apologize or anything because they, he knew beforehand what, what he has to do, uh, because of Chapter 11's, uh, stuff.

I, I realized late, you know, if it's for one month, this new provider, uh, the first, the first invoice that he sent me, that's when I, when I realized that I wanted to pay the invoice, the invoice was correct, you know, I, I. Invited and it was OK. I had the money on budget. I had everything set up, but I could not pay it because the, the account was, was frozen. And that way, that was when I realized, oops, I have a problem. I want to pay this invoice. I have the money, but I cannot pay. Uh, and it was, that's why, that's why I had to renegotiate and apologize and talk to him, and it took another month for me to, to put the judge, uh, uh, uh, on, on board, uh, and do the procedure accordingly and be able to pay him. So from my learning, what I prevented was cargo being, being in the same situation, have to apologize and, you know, having an invoice that he, he wouldn't be able to pay and. And that's it.