HomeMy WebLinkAboutResolution 4968-08-2018 A Resolution
NO. 4968-08-2018
AUTHORIZING LIQUIDATION AND SALE BY THE CITY MANAGER
OF STOCK IN AMERICAN AIRLINES GROUP INC. OWNED BY THE
CITY OF FORT WORTH, TEXAS AND BEING HELD BY AMERICAN
STOCK TRANSFER & TRUST COMPANY, LLC; AND FOR OTHER
PURPOSES
WHEREAS, American Airlines filed for bankruptcy protection on November 29,
2011; and
WHEREAS, as part of the settlement of the bankruptcy proceedings, the City of
Fort Worth ("City") was awarded stock in American Airlines Group Inc. in exchange for
release of the City's debt claims against American Airlines for unpaid water and sewer
charges; and
WHEREAS, the City currently holds 2,757 shares of stock; and
WHEREAS, the Department of Financial Management Services became aware of
the stock during a recent review of revenue being receipted into the General Fund; and
WHEREAS, corporate stock is not an authorized investment for the City under the
Public Funds Investment Act, Texas Local Government Code Chapter 2256, or the City's
Investment Policy and Strategy; and
WHEREAS, the City wishes to sell and divest itself of the stock.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF FORT WORTH, TEXAS, THAT:
1. The City Manager, or his designee, is authorized to liquidate and sell all shares
of American Airlines Group Inc. stock being held by American Stock Transfer
& Trust Company, LLC in the name of the City of Fort Worth (Company Number
18478); and
2. The City's Chief Financial Officer / Director of Financial Management Services
and the Assistant City Manager shall be authorized as designees under this
resolution to effect all steps and actions necessary to complete the liquidation
FoRTWORTH
Resolution No.4968-08-2018
and sell of said stock; and
3. Reasonable and necessary brokerage and liquidation-related costs owed to
American Stock Transfer & Trust Company, LLC in connection with the sale and
liquidation of the stock are hereby authorized and approved to be paid.
Adopted this 21St day of August, 2018.
ATTEST:
— -- -----
Mary J. Kayser, Cit' Sec etary A. FOJ��.�
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ORT WO T
City of Fort Worth, Texas
Mayor and Council Communication
COUNCIL ACTION: Approved on 8/21/2018 - Resolution No, 4968-08-2018
DATE: Tuesday, August 21, 2018 REFERENCE NO.: **G-19344
LOG NAME: 13AMERICAN AIRLINES STOCK SALE
SUBJECT:
Adopt Resolution Authorizing the City Manager to Sell Shares of American Airlines Stock Received in
Bankruptcy Proceeding in Satisfaction of Outstanding Water and Sewer Account Debts (ALL COUNCIL
DISTRICTS)
RECOMMENDATION:
It is recommended that the City Council adopt the attached resolution authorizing the City Manager to
liquidate and sell the stock in American Airlines Group Inc. that is owned by the City of Fort Worth, Texas.
DISCUSSION:
The purpose of this Mayor and Council Communication is to adopt a resolution authorizing the City
Manager to liquidate and sell 2,757 shares of American Airlines stock owned by the City of Fort Worth.
The Chief Financial Officer/ Director of Finance recently became aware that the City owned shares of
stock in American Airlines during a review of revenue being receipted into the General Fund. Corporate
stock is not an authorized investment under the Public Funds Investment Act, Texas Government Code
2256 (PFIA) or the City's General Portfolio Investment Policy and Strategy.
The City obtained the stock in connection with the American Airlines bankruptcy that was filed on
November 29, 2011. Receipt of the stock occurred when American Airlines was unable to pay amounts
owed to the City for water and sewer accounts. The stock has been held in trust by American Stock
Transfer& Trust Company, LLC. As part of the agreement to receive the stock in lieu of a payment from
American Airlines, the City agreed to release American Airlines from any remaining receivables that we
may have.
Proceeds from the sale of the stock will be deposited into the Water and Sewer Fund equal to the amount
of receivables due on the accounts at the time the stock was received plus the value of lost interest
earnings that would have accrued had the accounts been paid on time. Any proceeds in excess of this
amount will be credited to the General Fund to assist in offsetting costs of administering and responding to
the bankruptcy.
This M&C does not request approval of a contract with a business entity.
FISCAL INFORMATION /CERTIFICATION:
The Director of Finance certifies that upon the approval of the Resolution to liquidate and sell the
American Airlines stock, the assets will be sold and the proceeds from the sale will be deposited into the
Water and Sewer Fund equal to the receivable amounts of the accounts American Airlines held with the
City. Any excess funds generated from the sale will be deposited into the General Fund.
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CERTIFICATIONS:
Submitted for City Manager's Office by: Susan Alanis (8180)
Originating Department Head: Aaron Bovos (8517)
Additional Information Contact: John Samford (2318)
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