Republic Airways D&Os Win Dismissal of Securities Class Action

On behalf of the CEO, CFO and several former directors of Republic Airways, Skadden secured the dismissal of a securities fraud class action suit arising out of the company's 2016 restructuring. The regional airline, which operates flights on behalf of Delta, American and United pursuant to codeshare agreements with each, had been roiled by a nationwide pilot shortage that forced it to seek a complete restructuring of its codeshare agreements. After months of fruitless negotiations, Republic filed a petition under Chapter 11 and negotiated new agreements with each codeshare partner. Several hedge funds that had invested in Republic at the height of its staffing troubles, however, objected to those agreements. When their efforts to challenge the bankruptcy failed, they sued Republic's management and several directors, accusing them of misleading investors about the codeshare partners' reactions to Republic's staffing issues and the merit of a related lawsuit filed by Delta in late 2015. Following oral argument, Judge Lewis Kaplan of the United States District Court for the Southern District of New York dismissed the claims on March 29, 2018.