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May 30, 2008 4:06 PM

Plane Games: Cravath, Cadwalader, and Skadden on Failed United-U.S. Airways Merger

Posted by Brian Baxter

After more than a month of discussions about a merger that would have created the world's largest airline, U.S. Airways and UAL Corporation, the parent of United Airlines, have called off further talks. United Airlines is now widely expected to pursue a strategic alliance with Continental Airlines.

Law firms have been mum throughout the talks, refusing even to confirm their involvement. But The American Lawyer has now confirmed with sources who requested anonymity that New York's Cravath, Swaine & Moore represented Chicago-based United Airlines/UAL while Skadden, Arps, Slate, Meagher & Flom and Cadwalader, Wickersham & Taft represented Tempe, Ariz.-based U.S. Airways.

Advising United, which emerged from bankruptcy proceedings in 2006 and is the second-largest U.S. airline, were Cravath M&A partners Scott Barshay and Allen Finkelson and antitrust partner Katherine Forrest. (Forrest was named one of The American Lawyer's Fab Fifty Young Litigators in January 2007.)

Timothy Pohl, the cohead of Skadden's global corporate restructuring practice, and Charles "Rick" Rule, the head of Cadwalader's antitrust group, were the principal legal advisers for U.S. Airways, the seventh-largest U.S. airline. (Rule previously represented U.S. Airways in a failed attempt to merge with Delta when he was a partner at New York's Fried, Frank, Harris, Shriver & Jacobson.)

United and U.S. Airways began talking in April after a merger was announced between rival Delta Air Lines and Northwest Airlines. But rising fuel costs, tight credit markets, and aviation industry labor union opposition proved too much to overcome.

United had previously proposed merging with Houston-based Continental. At the time the fourth-largest U.S. airline rejected United's offer but is now reportedly reconsidering the alliance proposal.

Keep your seatbelts tightly fastened.

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