Robert A. Siegel Tom A. Jerman O’MELVENY & MYERS LLP th...

-1-

Robert A. Siegel Tom A. Jerman O’MELVENY & MYERS LLP 555 13th Street, NW, Suite 500W Washington, DC 20004-1109 (202) 383-5300 Attorneys for Debtors and Debtors-in-Possession

IN THE UNITED STATES BANKRUPTCY COURT FOR THE EASTERN DISTRICT OF VIRGINIA

ALEXANDRIA DIVISION ) In re: ) Chapter 11 Cases

) Case No. 02-83984-91 (SSM) US AIRWAYS GROUP, INC., et al., ) Hon. Stephen S. Mitchell

) Jointly Administered Debtors. )

)

SECOND INTERIM AND FINAL APPLICATION OF O’MELVENY & MYERS LLP FOR ORDER AUTHORIZING AND APPROVING COMPENSATION AND

REIMBURSEMENT OF EXPENSES

O’Melveny & Myers LLP (“O’Melveny”), special labor, regulatory, antitrust and

litigation counsel for US Airways Group, Inc. and seven of its subsidiaries and affiliates,1

debtors and debtors-in-possession in the above-captioned cases (collectively, the “Debtors” or

the “Company”), hereby submits its application (the “Application”) for an order (i) approving

compensation and reimbursement of expenses for the period from December 1, 2002 through

March 31, 2003, and (ii) approving on a final basis compensation and reimbursement of

expenses under the First Interim Application (as hereinafter defined) as well as this Application,

pursuant to sections 330(a)(1) and 331 of Chapter 11, Title 11 of the United States Code (the

1 The seven subsidiaries and affiliates are the following entities: US Airways, Inc., Allegheny Airlines, Inc., PSA Airlines, Inc., Piedmont Airlines, Inc, MidAtlantic Airways, Inc., US Airways Leasing and Sales, Inc. and Material Services Company, Inc. The Application is submitted before the Eastern District of Virginia, Alexandria Division, Bankruptcy Court (the “Court”).

-2-

“Bankruptcy Code”), and Rule 2016 of the Federal Rules of Bankruptcy Procedure (the

“Bankruptcy Rules”), the proposed form of which is attached hereto as Exhibit “A”.

O’Melveny certifies that the Debtors have received a copy of this Application, but have not

completed this review. In addition, O’Melveny certifies that a copy of this Application has been

served on the United States Trustees, counsel to the Official Committee of Unsecured Creditors

and counsel for the postpetition lenders. In support of the Application, O’Melveny respectfully

represents as follows:

I. PRELIMINARY STATEMENT

1. O’Melveny previously filed its first interim application for allowance of

compensation and reimbursement of expenses on January 16, 2003 (the “First Interim

Application”) in the aggregate amount of $1,642,179.18, which O’Melveny has since reduced to

$1,639,631.33.2 The First Interim Application covered the period from August 11, 2002 (the

"Petition Date") through November 30, 2002 (the “First Application Period”). As of the date of

this Application, the Court has not issued a ruling regarding O’Melveny’s First Interim

Application. O’Melveny seeks final allowance of its fees and expenses for the First Application

Period.

2. In addition, O’Melveny requests that this Court authorize compensation to

O’Melveny in the amount of $1,391,360.40 and reimbursement of expenses in the amount of

$95,811.57 for the period from December 1, 2002 through March 31, 2003 (the “Second

2 In reviewing its fee application data subsequent to the filing of the First Interim Application, O'Melveny discovered two errors in the First Interim Application. First, three individuals were inadvertently noted in the First Interim Application as having higher rates than the rates actually billed to US Airways. Second, a single time entry was inadvertently billed to US Airways twice, on separate invoices. After correcting the erroneous rates and eliminating one of the time entries, O'Melveny has lowered its request for fees by $2,547.85, the amount of O’Melveny’s inadvertent errors. O’Melveny provided notice of the errors, as well as corrected backup data reflecting the proper billing information, to the Office of the U.S. Trustee on January 28, 2003.

-3-

Application Period”). These amounts are net of $171,292.60 in legal fees O’Melveny has

written off by virtue of an automatic 10% discount and other voluntary write-downs.3

3. Pursuant to the Fee Protocol, the Debtors have been routinely paying

O’Melveny 85% of its fees and 100% of its expenses for the First and Second Application

Periods. O’Melveny continues to hold its retainer from the Debtors in the amount of

$812,316.48, which it proposes to apply against the 15% of fees that remain unpaid (the

“Holdback”) and any other amounts that remain unpaid for the First or Second Application

Periods. O’Melveny also proposes to apply any balance of the retainer to future fees and

expenses.

4. By this Application, O’Melveny seeks the entry of an order (a) finally

allowing all compensation that was the subject of the First Interim Fee Application, (b) finally

allowing compensation for the Second Application Period, and (c) authorizing and directing

O’Melveny to apply the retainer to payment of the Holdback and any remaining unpaid

disbursements for the First and Second Application Periods and permitting O’Melveny to apply

any balance of the retainer to future fees and expenses.

5. As hereinafter set forth in detail, the activities performed by O’Melveny,

in conjunction with the Debtors and the Debtors’ other retained professionals, were extensive

during the Second Application Period, and yielded significant benefits to the estates and their

creditors. Moreover, we believe it to be beyond dispute that O’Melveny’s efforts, as set forth

below, directly or indirectly contributed to the estates’ receipt of tangible benefits and the

successful resolution of the chapter 11 cases. In the circumstances, final allowance of all of

O’Melveny’s billable time and disbursements, and payment of the amount unpaid of

$829,722.96, is clearly warranted.

3 O’Melveny has applied a discount of 10% off its basic fees generally charged to non-bankrupt clients, amounting to $156,177.55. In addition, O’Melveny has reduced its request by $877.50 to account for 2.6 hours inadvertently billed by an O’Melveny attorney on December 18 to matter number –555 that should have been billed to another client. Finally, because O’Melveny estimated in its First Interim Application that it incurred approximately $37,800.00 in fees in preparation of the First Interim Application, but actually incurred $52,037.55 in fees for the preparation, O’Melveny has voluntarily written-off the difference between the estimated and actual fees in the amount of $14,237.55.

-4-

II. RETENTION OF O’MELVENY

6. O’Melveny has been the principal outside labor, regulatory, antitrust and

litigation counsel to the Company since 1996.

7. On August 11, 2002 (the “Petition Date”), the Debtors filed voluntary

petitions in this Court for reorganization relief under chapter 11 of the Bankruptcy Code. The

Debtors continued to operate their businesses and manage their properties as debtors-in-

possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. On August 12, 2002,

this Court entered a provisional order providing for the joint administration of these cases, which

have been consolidated for procedural purposes only. On August 20, 2002, the United States

Trustee appointed an Official Committee of Unsecured Creditors (the “Creditors Committee”) in

these cases.

8. The Debtors filed their application to employ O’Melveny with the Court

on August 11, 2002. O’Melveny charges legal fees on an hourly basis at its attorneys’ individual

hourly rates, which are based on the attorney’s seniority and experience, and which are adjusted

from time to time. During the Second Application Period, hourly rates were adjusted as of

January 1, 2003. O’Melveny also charges the Debtors for actual out-of-pocket expenses

incurred, such as court services, telecopies, computerized research, delivery services,

photocopies, long distance phone calls, fees associated with ongoing litigation, travel and other

costs necessarily incurred in connection with its representation of the Debtors. O’Melveny’s fee

structure and expense reimbursement policies were disclosed in the Debtor’s application to

employ O’Melveny, to which no party objected. This Court approved the O'Melveny retention

by order entered on August 12, 2002, a copy of which is attached hereto as Exhibit “B”.

III. FEE PROCEDURES AND MONTHLY FEE STATEMENTS

9. On August 16, 2002, the Court approved formation of a joint fee review

committee (the “Fee Review Committee”) to review, comment on and, if necessary, object to the

-5-

various fee applications filed in these cases. The Fee Review Committee has met and agreed

upon a protocol in these cases (the “Fee Review Protocol”).

10. On September 6, 2002, this Court entered an Administrative Order

Pursuant to 11 U.S.C. §§ 105(a) and 331 Establishing Procedures For Interim Compensation And

Reimbursement Of Expenses Of Professionals (Docket No. 445) (the “Administrative Order”).

Pursuant to paragraph 2(4) of the Administrative Order, O’Melveny is submitting this

Application to the Debtors, as well as to the Debtors’ postpetition lenders, counsel to the

Creditors Committee, and the United States Trustee.

11. In compliance with the Administrative Order and the Fee Review

Protocol, on or before the last day of each month following the month for which compensation

was sought, O’Melveny furnished to the Debtors, counsel to the Debtors, co-counsel to the

Debtors, as well as to counsel to the Debtors’ postpetition lenders, counsel to the Creditors

Committee, and the United States Trustee, a monthly statement of all professional fees and

disbursements incurred during the preceding calendar month. The parties had twenty (20) days

to review any such statement. If there were no objections, at the expiration of the twenty (20)

day period, the Debtors were ordered to promptly pay eighty-five percent (85%) of the fees and

one hundred percent (100%) of the expenses identified in each monthly statement. O’Melveny

submitted monthly statements for each month during the Second Application Period and no

objections were received. Accordingly, O’Melveny has been routinely paid 85% of its total

requested fees and 100% of its expenses during the Second Application Period.

12. O'Melveny received from the Debtors an “evergreen” retainer of $850,000

prepetition. Pursuant to the terms of its Engagement Letter, O’Melveny has applied $37,683.52

of that retainer to satisfy prepetition expenses.

13. To the best of O’Melveny’s knowledge, information and belief, the

Debtors have paid postpetition expenses in the ordinary course, and there are currently no

unpaid, undisputed ordinary course, postpetition operating expenses in these cases.

-6-


Debtors have sufficient funds on hand to pay the compensation and reimbursement of expenses

requested herein.


Debtors have filed with the United States Trustee all monthly operating reports presently due,

and have paid all quarterly fees to the United States Trustee, which are presently due.

16. Consistent with clause (j) of the Fee Review Protocol, O’Melveny is

providing in this Application a “general description of the services rendered during the fee

period” and has “dispense[d] with a discussion of the legal standards for granting fee

applications.” Moreover, the actual time records of each professional are appended as an exhibit

to this Application, thereby providing a detailed accounting of the services provided for

consideration by the Joint Fee Review Committee, the United States Trustee, and the Court.

IV. PRESENT POSTURE OF CASE

17. By order dated March 31, 2003, the Court confirmed the Debtors’ First

Amended Joint Plan of Reorganization of US Airways Group, Inc. and its Affiliated Debtors and

Debtors-in-Possession, which was approved by the Court on March 31, 2003. (Docket No.

2062) (the “Plan”), concluding these cases in just seven months.

18. During the Second Application Period, and leading up to Debtors’ exit

from bankruptcy, O’Melveny handled numerous matters for the Debtors and helped ensure that

the daily operations of US Airways ran smoothly despite the bankruptcy.

A. Labor Matters

19. O’Melveny continued to handle all manner of labor matters for its long-

standing labor client, ranging from continuing prepetition matters in bankruptcy, to working with

the Debtors to ensure that labor and benefit matters critical to US Airways’ exit from bankruptcy

were satisfactorily handled and concluded. O’Melveny provided daily counseling and advice

regarding labor and employment matters, including ordinary course employee disputes and

-7-

litigation, advice regarding concessionary agreements and disputes with US Airways’ unions,

and significant employee benefit matters in bankruptcy.

B. Regulatory Matters

20. O’Melveny handled a wide variety of regulatory-related matters for US

Airways during the Second Application Period. As part of these efforts, O’Melveny provided

extensive counseling, developed regulatory strategies, and, where applicable, researched and

prepared legal memoranda and regulatory filings on the Company’s restructuring efforts

including financing documents, loan agreements, and security agreements; slot and airport access

issues; international route authorities and operating rights from United States authorities and

foreign officials; bilateral and regulatory issues of potential new route opportunities; US

Airways’ marketing and codeshare agreement with United Airlines; alliances between other

carriers (e.g., Delta-Northwest-Continental; Aloha-Hawaiian); the creation, organization,

proposed operations, and regulatory re-certification of MidAtlantic Airways; the proposed

American Airlines-British Airways codeshare agreement; the Company’s advertising efforts and

customer service practices and procedures; and general regulatory pleadings on foreign and

domestic aviation issues, including route renewals, responses to regulatory proceedings,

inquiries, investigations, enforcement actions, legislative matters, and administrative

rulemakings.

C. Antitrust/Litigation Matters

21. During the Second Application Period, O’Melveny has consulted with US

Airways on an ongoing basis concerning antitrust issues and questions that have arisen in the

regular course of its business. The matters involved have included such continuing subjects as

compliance with an outstanding consent decree and advice relating to a variety of business

matters occurring in the normal course of the airline business. O’Melveny has also provided

ongoing representation of US Airways with respect to a purported antitrust class action in the

Eastern District of Michigan, and other prepetition antitrust and related litigation matters.

-8-

V. SUMMARY OF COMPENSATION REQUESTED AND SERVICES

RENDERED TO THE ESTATES DURING THIS PERIOD4

22. O’Melveny seeks approval of professional fees in the amount of

$1,391,360.40 and reimbursement of expenses in the amount of $95,811.57 for the Second

Application Period. In accordance with the Guidelines, O’Melveny has classified all services

performed for which compensation is sought for this period. Exhibit “C” is a table listing the

names of all attorneys and paraprofessionals who have worked for US Airways during the

Second Application Period, and their respective hourly rates and amounts billed, in addition to

other summary information required by the Guidelines. Exhibit “D” to this Second Interim

Application sets forth with particularity each category of expenses incurred by O’Melveny on

behalf of US Airways.5

23. Because O’Melveny was retained as special counsel to the Debtors, the

activities of O’Melveny are divided into internal matter numbers that do not correspond to the

categories suggested by the Guidelines. As noted above, Exhibit “E” contains O’Melveny’s

detailed invoices in matter number order. O’Melveny has made every effort to place all time

entries under the proper matter number; however, it should be noted that in some circumstances

an entry could have been properly placed in more than one of the matter numbers. In such

circumstances, O’Melveny has used its best efforts to place the time entry under the matter

number that represents the primary purpose of the services rendered. Time entries do not appear

under more than one matter number.

For purposes of the summaries below, the matters to which O’Melveny gave

attention during the Second Application Period are listed in descending order of the amount

4 O’Melveny has taken every effort to ensure that this Second Interim Application is prepared in accordance with the Guidelines for Reviewing Applications For Compensation & Reimbursement of Expenses filed under 11 U.S.C. § 330 (the “Guidelines”) to the extent applicable. 5 O'Melveny notes that the expenses listed on Exhibit “D” are the expenses that were actually incurred during the Second Application Period. Due to ordinary course delays in invoicing by various third parties, these figures are slightly different than the expenses identified at the end of each invoice contained in Exhibit “D,” which reflect expenses received and processed as of the date of the invoices reproduced herein as Exhibit “E,” regardless of the date on which such expenses where incurred.

-9-

billed. Under each matter number, the tasks are explained more fully. Although recitation of

every item of professional services that O’Melveny performed would unduly burden the Court,

the following summary highlights the major tasks to which O’Melveny devoted substantial time

and attention during the Second Application Period. Included in each summary is a chart of

attorney and professional time and fees devoted to that matter. In some of the charts, individual

professional’s names are listed twice, with each line reflecting the rates charged either before or

after the January 1, 2003 rate adjustment.6

24. Restructuring Project – Labor (-560).

On an ongoing basis, O’Melveny provided the Debtors with day-to-day labor-

related written and oral advice with respect to the bankruptcy. The following is a list of the

many issues addressed by O’Melveny over the Second Application Period.

i. O’Melveny provided US Airways ongoing advice and counsel regarding

concessionary and other agreements it was negotiating with its various employee groups;

ii. O’Melveny provided extensive legal and factual analysis to US Airways

regarding the potential need to file papers in the Bankruptcy Court pursuant to Section 1113 in

the event US Airways was unable to achieve the necessary concessions required from its various

labor unions as a result of a second round of concessionary talks. In doing so, O’Melveny

drafted Section 1113 papers that were revised to account for the various potential scenarios the

Company was facing should voluntary concessionary agreements not be reached;

iii. Also during this round of concessionary talks, O’Melveny consulted with US

Airways regarding strategy and negotiations with union groups, advised US Airways regarding

force majeure and other contract-related issues, and participated in negotiations with various

union representatives;

iv. O’Melveny advised US Airways regarding its pilot pension plan distress

termination motion and reply brief and proceedings in the Bankruptcy Court, including retiree

6 In addition, three separate rates are listed for Evelyn Becker, two of which reflect the rates charged for her services in December 2002 and January 2003, respectively. The third rate reflects her election to the O’Melveny partnership, which became effective February 1, 2003.

-10-

claims and objections, drafted portions of the briefs, attended termination-related Bankruptcy

Court proceedings, planned and prepared for a possible expedited pension grievance hearing,

participated in pilot negotiations, and generally advised US Airways regarding the legal status of

certain pilot pension issues and possible replacements for the pilot pension plan

v. O’Melveny analyzed the potential modifications to US Airways’ health,

welfare and pension benefit plans;

vi. O’Melveny provided legal analysis regarding a potential temporary restraining

order or injunction regarding employee groups potential slow downs or sick-outs under the RLA

and Bankruptcy Code, drafted a motion for injunctive relief and related papers, and

communicated extensively with the client and potential witnesses and declarants;

vii. O’Melveny conferred with US Airways regarding ERISA sections of the DIP

liquidity facility and ATSB loan and credit agreements;

viii. O’Melveny handled certain pre-petition EEOC and state agency charges of

discrimination that entered into the investigatory or conciliation stage during the bankruptcy,

including consultation with the client and agency personnel;

ix. O’Melveny provided general analysis of the proof of claim and estimation

process for labor matters to US Airways;

x. O’Melveny handled various proof of claim and bankruptcy stay issues that

arose in various employment matters as a result of the bankruptcy;

xi. O’Melveny provided extensive research and analysis of potential liability in the

event of liquidation under the wage protection statutes in effect in the various states in which US

Airways does business;

xii. To comply with the Court’s fee application requirements, numerous

O’Melveny attorneys drafted summaries of individual matters, which were then compiled by a

fee application team into O’Melveny’s First Interim Fee Application;

-11-

xiii. O'Melveny provided analysis of the effect of change of US Airways' nine

collectively bargained agreements on the restructuring and drafted a change of control letter

agreements;

xiv. To ensure it responded to all relevant filings, O’Melveny reviewed all filings in

the Bankruptcy Court for relevance to US Airways’ labor, regulatory, antitrust and litigation

matters; and

xv. To complete the ATSB loan transaction process, O’Melveny researched and

drafted a "no violation" opinion letter regarding various transactional documents as they relate to

US Airways’ labor agreements.

Name Hourly Rate

Total Hours Billed Fees Incurred

Fees Billed After 10% discount

Dipanwita Amar $390.00 0.50 $195.00 $175.50 Carla J. Bennet $370.00 0.30 $111.00 $99.90 Donald Bliss $600.00 1.30 $780.00 $702.00 Benjamin G. Bradshaw $355.00 1.90 $674.50 $607.05 Benjamin G. Bradshaw $390.00 5.60 $2,184.00 $1,965.60 Scott H. Dunham $600.00 0.30 $180.00 $162.00 David E. Gordon $600.00 1.30 $780.00 $702.00 Adam C. Harris $630.00 0.50 $315.00 $283.50 Chris A. Hollinger $485.00 62.10 $30,118.50 $27,106.65 Tom Jerman $540.00 24.00 $12,960.00 $11,664.00 Tom Jerman $600.00 118.60 $71,160.00 $64,044.00 Aparna B. Joshi $320.00 7.00 $2,240.00 $2,016.00 Jeffrey I. Kohn $630.00 44.00 $27,720.00 $24,948.00 Adam P. Kohsweeney $410.00 26.10 $10,701.00 $9,630.90 Shari P. Lipton $370.00 7.20 $2,664.00 $2,397.60 Timothy H. Madden $270.00 39.50 $10,665.00 $9,598.50 Timothy B. McCaffrey $380.00 16.90 $6,422.00 $5,779.80 Michael Murphy $180.00 2.10 $378.00 $340.20 Michael Murphy $190.00 28.60 $5,434.00 $4,890.60 Patrick Rizzi $410.00 3.30 $1,353.00 $1,217.70 Ray W. Rodriguez $370.00 0.50 $185.00 $166.50 William Satchell $500.00 10.30 $5,150.00 $4,635.00 Elizabeth Seabury $410.00 55.80 $22,878.00 $20,590.20 Rachel Shapiro $320.00 48.70 $15,584.00 $14,025.60 Rachel Shapiro $370.00 128.30 $47,471.00 $42,723.90 Peter Shinevar $525.00 35.30 $18,532.50 $16,679.25

-12-

Robert Siegel $600.00 37.70 $22,620.00 $20,358.00 Robert Siegel $600.00 279.80 $167,880.00 $151,092.00 Heejung Son $210.00 1.00 $210.00 $189.00 Heejung Son – NR $320.00 33.10 $10,592.00 $9,532.80 Shari P. Steinberg $370.00 0.50 $185.00 $166.50 Stephen J. Stern $660.00 0.80 $528.00 $475.20 Henry C. Thumann $680.00 1.00 $680.00 $612.00 Kathleen Kelly Tremblay $375.00 1.40 $525.00 $472.50 Kathleen Kelly Tremblay $390.00 2.50 $975.00 $877.50 Kenneth J. Turnbull $525.00 1.40 $735.00 $661.50 Karen M. Wahle $460.00 0.50 $230.00 $207.00 Robert Winter $355.00 14.40 $5,112.00 $4,600.80 Robert Winter $390.00 85.60 $33,384.00 $30,045.60 Florence Carter $125.00 14.20 $1,775.00 $1,597.50 Daniel Fody $125.00 0.50 $62.50 $56.25 Allison Hart $125.00 23.20 $2,900.00 $2,610.00 Benjamin Holmes $150.00 7.50 $1,125.00 $1,012.50 Justin Keelty $110.00 0.80 $88.00 $79.20 Catherine Reese $150.00 48.60 $7,290.00 $6,561.00 Catherine Reese $150.00 78.70 $11,805.00 $10,624.50 Mark Simakovsky $125.00 43.80 $5,475.00 $4,927.50 Geoffrey Tibbetts $160.00 20.00 $3,200.00 $2,880.00 Meloni Warco $75.00 0.50 $37.50 $33.75 Totals 1,367.50 $574,249.50 $516,824.55

25. Restructuring – Regulatory (-569). This matter involves legal services

that O’Melveny has provided US Airways in connection with the Company’s restructuring

efforts. Specifically, O’Melveny reviewed and analyzed the ATSB financing documents, loan

agreements, and security agreements. O’Melveny also advised, consulted, and prepared filings

on a broad range of regulatory issues related to these agreements involving, among other things,

slots, air carrier certifications, and citizenship. O’Melveny also participated in ongoing

discussions with the lenders’ and investor’s corporate and regulatory counsel concerning slot

utilization, certifications, covenants, representations, due diligence, and the maintenance of a slot

reporting system. O’Melveny also counseled the Company and commented on, or drafted,

-13-

certain language for the agreements related to these various issues. O’Melveny advised the

Company and prepared documentation related to its FCC licenses and other regulatory licenses.7

Name Hourly Rate



Donald Bliss $600.00 0.60 $360.00 $324.00Donald Bliss $600.00 2.10 $1,260.00 $1,134.00Benjamin Bradshaw $355.00 2.30 $816.50 $734.85Benjamin Bradshaw $390.00 106.50 $41,535.00 $37,381.50Joel Burton $600.00 2.90 $1,740.00 $1,566.00Joel Burton $600.00 175.70 $105,420.00 $94,878.00Richard Dyer $320.00 2.30 $736.00 $662.40David E. Gordon $600.00 0.60 $360.00 $324.00Elizabeth A. Leckie $550.00 5.50 $3,025.00 $2,722.50Patrick Rizzi $390.00 0.50 $195.00 $175.50Patrick Rizzi $410.00 76.40 $31,324.00 $28,191.60Todd Rosenberg $335.00 1.60 $536.00 $482.40Todd Rosenberg $380.00 22.20 $8,436.00 $7,592.40William Satchell $500.00 37.30 $18,650.00 $16,785.00Mel A. Schwing $320.00 14.60 $4,672.00 $4,204.80Martha Anne Cocker $75.00 0.10 $7.50 $6.75Metasebia Fekadu $150.00 0.30 $45.00 $40.50Metasebia Fekadu $160.00 57.80 $9,248.00 $8,323.20Bryan A. Power $160.00 8.90 $1,424.00 $1,281.60 Totals 518.20 $229,790.00 $206,811.00

26. Regulatory Advice (-118). This matter number is the general file for

regulatory work that does not have its own matter number. The following areas were addressed

during the Second Application Period.

a. Aviation Regulatory Proceedings and Advice: This category

involves legal services that O’Melveny has provided US Airways in connection with a broad

range of aviation-related regulatory activities. Specifically, O’Melveny has reviewed, consulted,

advised, researched, and prepared regulatory pleadings on foreign and domestic aviation issues.

7 Certain regulatory matters related to the Company’s restructuring were separately billed to file number –118 as well.

-14-

This includes route applications and renewals, responses to regulatory proceedings, inquiries,

investigations, enforcement actions, legislative matters, and administrative rulemakings. As part

of the services O’Melveny provides, O’Melveny attorneys monitor and review regulatory filings

by other carriers, advising US Airways of these filings and on specific industry developments in

the regulatory and legislative areas. As the designated agent to receive regulatory pleadings on

behalf of US Airways, O’Melveny receives virtually all aviation-related pleadings filed by

domestic and international air carriers at the Department of Transportation (the “DOT”).

b. General Restructuring Issues: This category involves legal

services that O’Melveny has provided US Airways in connection with a broad range of

regulatory issues related to its restructuring. Specifically, O’Melveny consulted, advised, and

researched regulatory issues related to US Airways’ Chapter 11 filing.

Name Hourly Rate



David T. Beddow $525.00 0.20 $105.00 $94.50Donald T. Bliss $600.00 7.80 $4,680.00 $4,212.00Donald T. Bliss $600.00 28.70 $17,220.00 $15,498.00Benjamin G. Bradshaw $355.00 10.00 $3,550.00 $3,195.00Benjamin G. Bradshaw $390.00 32.70 $12,753.00 $11,477.70Joel Burton $600.00 26.40 $15,840.00 $14,256.00Joel Burton $600.00 82.80 $49,680.00 $44,712.00Suzanne Rich Folsom $410.00 0.20 $82.00 $73.80Kerry A. Krentler $320.00 0.10 $32.00 $28.80Patrick R. Rizzi $390.00 8.20 $3,198.00 $2,878.20Patrick R. Rizzi $410.00 32.00 $13,120.00 $11,808.00Mel Schwing $260.00 1.00 $260.00 $234.00Mel Schwing $320.00 13.30 $4,256.00 $3,830.40Kimberly Brown $80.00 0.50 $40.00 $36.00Daniel A Fody $125.00 5.30 $662.50 $596.25Bryan A. Power $150.00 2.50 $375.00 $337.50Bryan A. Power $160.00 1.70 $272.00 $244.80Lisa M. Stewart $130.00 6.70 $871.00 $783.90 Totals 260.10 $126,996.50 $114,296.85

-15-

27. Alliances (-559). This matter involves legal services that O’Melveny has

provided US Airways in connection with its marketing and codeshare agreement with United

Airlines, as well as alliances between other carriers. Specifically, O’Melveny researched,

consulted and advised US Airways on the regulatory requirements, both domestic and

international, involved in initiating and implementing the codeshare agreement. O’Melveny

assisted US Airways in collecting, reviewing, and preparing documents and responses related to

the codeshare agreement as requested by the regulatory authorities reviewing the agreement.

O’Melveny also prepared regulatory filings and notices related to the alliance agreement, and

advised the Company on the regulatory review process, related strategy, and proposed carve-

outs. O’Melveny evaluated comments regarding the US Airways-United marketing alliance

submitted to DOT by other parties, and O’Melveny consulted with the Company regarding press

releases and marketing issues related to the US Airways-United marketing alliance. In addition

to the services O’Melveny provided in connection with the US Airways-United Agreement,

O’Melveny also advised, consulted, and prepared regulatory filings in connection with the

proposed alliance arrangement between Delta, Northwest, and Continental.

Name Hourly Rate



Donald T. Bliss $600.00 1.40 $840.00 $756.00Benjamin Bradshaw $355.00 7.60 $2,698.00 $2,428.20Benjamin Bradshaw $390.00 35.40 $13,806.00 $12,425.40Joel Burton $600.00 27.50 $16,500.00 $14,850.00Joel Burton $600.00 72.70 $43,620.00 $39,258.00Laura E. Golub $300.00 0.80 $240.00 $216.00Sital Kalantry $320.00 0.60 $192.00 $172.80Claudia Ray $440.00 0.50 $220.00 $198.00Patrick Rizzi $390.00 23.20 $9,048.00 $8,143.20Patrick Rizzi $410.00 50.20 $20,582.00 $18,523.80Daniel A Fody $110.00 1.00 $110.00 $99.00Bryan Power $150.00 1.50 $225.00 $202.50Bryan Power $160.00 4.70 $752.00 $676.80Mark Simakovsky $125.00 5.60 $700.00 $630.00 Totals 232.70 $109,533.00 $98,579.70

-16-

28. Consumer Issues (-240). This matter involves legal services that

O’Melveny has provided US Airways in connection with consumer-related regulations and

government inquiries and investigations into US Airways’ customer service practices and

procedures. Specifically, O’Melveny has consulted, advised, and prepared responses to DOT

inquiries concerning US Airways’ compliance with disability-related regulations. This includes

collecting, reviewing, and preparing documents sought by DOT. O’Melveny has also consulted,

advised, and prepared responses to DOT inquiries concerning US Airways’ compliance with

anti-discrimination regulations. This includes collecting, reviewing, and preparing documents

sought by DOT in connection with its investigation of certain complaints concerning allegations

of racial and national origin discrimination. This also includes strategizing with the Company

regarding CRS issues and preparing regulatory filings in connection with DOT’s CRS

rulemaking proceedings.

Name Hourly Rate



Kenneth L. Blalack $375.00 0.10 $37.50 $33.75Donald T. Bliss $600.00 0.50 $300.00 $270.00Benjamin G. Bradshaw $355.00 16.90 $5,999.50 $5,399.55Benjamin G. Bradshaw $390.00 38.30 $14,937.00 $13,443.30Joel Burton $600.00 12.70 $7,620.00 $6,858.00Joel Burton $600.00 49.60 $29,760.00 $26,784.00Patrick R. Rizzi $390.00 11.20 $4,368.00 $3,931.20Patrick R. Rizzi $410.00 47.90 $19,639.00 $17,675.10Henry Thumann $660.00 0.10 $66.00 $59.40Robert E. Winter $355.00 0.30 $106.50 $95.85Martha Cocker $75.00 - $0.00 $0.00Debra Fisher $85.00 - $0.00 $0.00Bryan A. Power $150.00 6.50 $975.00 $877.50Bryan A. Power $160.00 12.50 $2,000.00 $1,800.00Mark D. Simakovsky $125.00 0.60 $75.00 $67.50 Totals 197.20 $85,883.50 $77,295.15

29. High Density Rule (-247). This matter involves legal services that

O’Melveny has provided US Airways in connection with slot and airport access issues.

-17-

Specifically, O’Melveny has consulted, advised, and prepared regulatory pleadings dealing with

slots and slot exemption requests. This includes: preparing applications for beyond and within

perimeter slot exemptions at Ronald Reagan Washington National Airport, evaluating other

carriers’ applications, developing US Airways’ response strategy, preparing comments, and

evaluating other carriers’ comments; and strategizing and advising on AIR-21 slot exemptions.

Name Hourly Rate



Donald Bliss $600.00 1.90 $1,140.00 $1,026.00Benjamin G. Bradshaw $355.00 11.70 $4,153.50 $3,738.15Benjamin G. Bradshaw $390.00 17.10 $6,669.00 $6,002.10Joel Burton $600.00 30.20 $18,120.00 $16,308.00Joel Burton $600.00 49.50 $29,700.00 $26,730.00Elizabeth A. Leckie $550.00 3.00 $1,650.00 $1,485.00Patrick R. Rizzi $390.00 25.40 $9,906.00 $8,915.40Patrick R. Rizzi $410.00 24.00 $9,840.00 $8,856.00Edward Eads $130.00 2.20 $286.00 $257.40Debra Fisher $85.00 0.40 $34.00 $30.60Bryan Power $160.00 4.50 $720.00 $648.00Totals 169.90 $82,218.50 $73,996.65

30. US Airways General Labor (-007). Under this matter number, O’Melveny

bills general labor and employment advice and counseling work it performs for US Airways on a

day-to-day basis. For example, during the Second Application Period, O’Melveny provided US

Airways with advice regarding specific employee situations related to the federal Family and

Medical Leave Act, US Airways employee leave policies, and release of information issues.

O’Melveny also billed to this file general analysis and client consultation regarding the handling

of prepetition charges of discrimination filed with the EEOC or state administrative agencies

charged with handling allegations of employment discrimination. If a charge required a position

statement or investigation, O’Melveny may have billed those activities to this matter number as

well. O’Melveny also worked to prepare responses to US Airways’ audit letter request.

-18-

During the Second Application Period, O’Melveny also advised US Airways

regarding compliance with federal and state laws in light of US Airways’ restructuring-related

employee layoffs. In addition, O’Melveny prepared an analysis of federal and state military

leave laws. O’Melveny also presented US Airways employees with Zero Tolerance Training – a

workshop on diversity and anti-discrimination issues. In addition, O’Melveny continued to

handle a complaint of discrimination filed by claimant Bolduc with a state agency after the

Petition Date alleging post-petition violations of anti-discrimination laws. O’Melveny assessed

the matter, analyzed the factual background, consulted with US Airways, and represented US

Airways’ position to the agency in a written position statement. O’Melveny defended US

Airways in a case seeking health insurance benefits brought in Maryland Superior Court and

negotiated a settlement. In addition, O’Melveny provided analysis regarding a potential

employee work slowdown, drafted a cease-and-desist letter and analyzed potential avenues of

legal recourse. O’Melveny also provided US Airways with an analysis regarding union dues

check off language and other union collective bargaining issues. O’Melveny also handled a

labor commission hearing for US Airways in California.

Name Hourly Rate



Dipanwita Amar $390.00 17.30 $6,747.00 $6,072.30Evelyn Becker $390.00 19.80 $7,722.00 $6,949.80Evelyn Becker $410.00 0.20 $82.00 $73.80Evelyn Becker $420.00 0.80 $336.00 $302.40Michael W. Garrison $390.00 8.60 $3,354.00 $3,018.60Chris A. Hollinger $485.00 12.40 $6,014.00 $5,412.60Tom A. Jerman $540.00 2.20 $1,188.00 $1,069.20Tom A. Jerman $600.00 2.60 $1,560.00 $1,404.00Jeffrey I. Kohn $610.00 1.00 $610.00 $549.00Jeffrey I. Kohn $630.00 1.40 $882.00 $793.80Gordon E. Krischer $600.00 0.10 $60.00 $54.00Michael L. Murphy $190.00 46.30 $8,797.00 $7,917.30Simone Schiller $210.00 10.70 $2,247.00 $2,022.30Simone Schiller $280.00 18.50 $5,180.00 $4,662.00Rachel A. Shapiro $320.00 7.90 $2,528.00 $2,275.20Rachel A. Shapiro $370.00 6.30 $2,331.00 $2,097.90

-19-

Robert Siegel $600.00 0.60 $360.00 $324.00Robert Siegel $600.00 2.90 $1,740.00 $1,566.00Heejung Son $320.00 25.00 $8,000.00 $7,200.00Kathleen Kelly Tremblay $375.00 1.80 $675.00 $607.50Kathleen Kelly Tremblay $390.00 23.10 $9,009.00 $8,108.10Henry C. Thumann $660.00 0.30 $198.00 $178.20Karen M. Wahle $460.00 5.90 $2,714.00 $2,442.60Ian R. Beste $85.00 0.30 $25.50 $22.95Martha Anne Cocker $75.00 1.00 $75.00 $67.50Catherine Reese $150.00 0.50 $75.00 $67.50Catherine Reese $150.00 17.30 $2,595.00 $2,335.50Meloni S. Warco $75.00 3.00 $225.00 $202.50 Totals 237.80 $75,329.50 $67,796.55

31. Hall, Etc. v. United Airlines, et al. (-323). This prepetition matter was

filed against numerous carriers, including US Airways, alleging a conspiracy to reduce travel

agency commissions. During the December-March period, O’Melveny monitored filings to

ensure that US Airways’ interests were not compromised and that its positions were not

misrepresented. O'Melveny also began to prepare for summary judgment and trial.

Name Hourly Rate



Rebecca H. Farrington $380.00 22.50 $8,550.00 $7,695.00Neil K. Gilman $410.00 34.90 $14,309.00 $12,878.10Henry C. Thumann $660.00 0.60 $396.00 $356.40Henry C. Thumann $680.00 32.00 $21,760.00 $19,584.00Martha Anne Cocker $75.00 0.20 $15.00 $13.50Geoffrey L. Tibbets $160.00 18.50 $2,960.00 $2,664.00 Totals 108.70 $47,990.00 $43,191.00

32. Keystone Business Machines, Etc. v. US Airways (-265). This matter

involves legal services that O’Melveny has provided to US Airways in connection with

purported antitrust class actions pending in the Eastern District of Michigan. Specifically,

O’Melveny consulted, advised, and participated in preparations related to Plaintiffs’ motion to

-20-

lift the bankruptcy court’s automatic stay. O’Melveny consulted and advised the Company

concerning the potential treatment of claims in this litigation by the Bankruptcy Court.

O’Melveny consulted and advised the Company concerning developments in this litigation,

including status conferences, the motion by Delta and Northwest for rehearing en banc of the

Sixth Circuit’s order denying review of the District Court’s class certification ruling, and the

Bankruptcy Court’s confirmation order and its impact on the litigation.

Name Hourly Rate



Benjamin G. Bradshaw $355.00 18.00 $6,390.00 $5,751.00Benjamin G. Bradshaw $390.00 18.00 $7,020.00 $6,318.00Ben H. Logan $590.00 4.60 $2,714.00 $2,442.60Ben H. Logan $600.00 0.60 $360.00 $324.00Henry C. Thumann $660.00 5.70 $3,762.00 $3,385.80Henry C. Thumann $680.00 17.70 $12,036.00 $10,832.40Robert Winter $355.00 8.50 $3,017.50 $2,715.75Robert Winter $390.00 6.30 $2,457.00 $2,211.30Martha Anne Cocker $75.00 0.10 $8.50 $7.65Debra Fisher $85.00 0.20 $17.00 $15.30Bryan A. Power $160.00 6.00 $960.00 $864.00 Totals 85.70 $38,742.00 $34,867.80

33. Employee Benefit Matters (-114). Prior to the Petition Date and

continuing after it, O’Melveny has provided regular advice and counsel to US Airways regarding

employee benefit and ERISA matters, including the operation of US Airways employee benefit

plans and the requirements of changing laws and regulations. (Litigation involving ERISA and

other employee benefits matters is billed under separate matter numbers). The following areas

were addressed during the Second Application Period:

a. Provide advice regarding required amendments to tax-qualified

pension and profit-sharing plans for tax law changes in the Economic Growth Tax Relief and

Recovery Act (“EGTRRA”); review and edit draft EGTRRA plan amendments;

-21-

b. Confer with US Airways’ in-house counsel regarding termination

of US Airways Employee Stock Ownership Plan (“ESOP”), repayment of ESOP loan, and

allocation of unallocated ESOP shares; prepare plan amendments to terminate ESOP;

c. Review and edit year-end amendments to Retirement Income Plan

for Pilots and related ERISA § 204(h) notices for Plan changes;

d. Confer with client regarding pension plan investment issues, and

review investment fund documents relating to potential investments;

e. Review and edit proposed investment management agreements for

employee benefit plans;

f. Confer with client regarding revised employee elections for

Flexible Spending Accounts and COBRA premium changes arising from medical plan changes;

g. Update advice to client on brokerage windows and mutual fund

windows as possible investment options in defined contribution retirement plans;

h. Confer with client regarding termination of Health Care VEBA;

and

i. Confer with client regarding executive medical plan and Internal

Revenue Code nondiscrimination issues.

Name Hourly Rate



Winston Chang $320.00 1.00 $320.00 $288.00Summer Conley $335.00 40.40 $13,534.00 $12,180.60Summer Conley $380.00 14.90 $5,662.00 $5,095.80Mark C. Easton $430.00 2.00 $860.00 $774.00Allan I. Grossman $440.00 0.30 $132.00 $118.80Allan I. Grossman $450.00 3.60 $1,620.00 $1,458.00Robert J. Lowe $450.00 10.10 $4,545.00 $4,090.50Peter Ritter $450.00 5.00 $2,250.00 $2,025.00Kathryn A. Sanders $540.00 2.30 $1,242.00 $1,117.80Peter O. Shinevar $510.00 3.40 $1,734.00 $1,560.60Peter O. Shinevar $525.00 8.40 $4,410.00 $3,969.00Gary Tell $390.00 1.40 $546.00 $491.40Gary Tell $410.00 0.20 $82.00 $73.80

-22-

Michael Wisnev $590.00 1.70 $1,003.00 $902.70 Totals 94.70 $37,940.00 $34,146.00

34. International Route Proceedings and Issues (-275). This matter involves

legal services that O’Melveny has provided US Airways in connection with international route

authorities, international route proceedings, and international codeshare agreements.

Specifically, O’Melveny consulted, advised, and prepared regulatory applications seeking

international route authorities and operating rights. This includes seeking the appropriate

regulatory approvals from United States authorities as well as operating licenses and permits

from officials in the applicable foreign countries in Europe, the Caribbean, and Latin America.

O’Melveny has also researched and counseled US Airways on bilateral and regulatory issues of

potential new route opportunities under consideration by the Company.

Name Hourly Rate



Donald T. Bliss $600.00 2.70 $1,620.00 $1,458.00Benjamin G. Bradshaw $355.00 7.70 $2,733.50 $2,460.15Benjamin G. Bradshaw $390.00 22.10 $8,619.00 $7,757.10Joel Burton $600.00 6.50 $3,900.00 $3,510.00Joel Burton $600.00 17.00 $10,200.00 $9,180.00Patrick R. Rizzi $390.00 6.20 $2,418.00 $2,176.20Patrick R. Rizzi $410.00 12.10 $4,961.00 $4,464.90Bryan A. Power $150.00 2.50 $375.00 $337.50Bryan A. Power $150.00 1.50 $225.00 $202.50 Totals 78.30 $35,051.50 $31,546.35

35. Jeffreys, Gary, et al. v. US Airways, Inc. et al. (-555). Prior to the Petition

Date, plaintiffs, all of whom are employees or former employees of US Airways represented by

the Communication Workers of America, AFL-CIO (“CWA”), brought a hybrid action under the

Railway Labor Act (the “RLA”), alleging that CWA breached its duty of fair representation and

that US Airways breached its collective bargaining agreement with the CWA. After the Petition

-23-

Date, O’Melveny prepared a Suggestion of Bankruptcy for stay of the case. Since the automatic

stay applied only to US Airways, the action proceeded as against CWA. Discovery has been

ongoing as between the plaintiffs and CWA and both requested to depose two US Airways

employees. During the Second Application Period, O'Melveny prepared US Airways witnesses

for their depositions, then appeared at and defended US Airways witnesses at their depositions.

O'Melveny also collected and produced documents responsive to plaintiffs' discovery requests,

and coordinated with US Airways personnel to meet discovery obligations.

Name Hourly Rate



Tom A. Jerman $540.00 3.80 $2,052.00 $1,846.80Tom A. Jerman $600.00 3.40 $2,040.00 $1,836.00Jeffrey I. Kohn $630.00 1.20 $444.00 $399.60Rachel A. Shapiro $370.00 0.20 $74.00 $66.60Kathleen Kelly Tremblay $375.00 21.20 $7,950.00 $7,155.00Kathleen Kelly Tremblay $390.00 30.40 $11,856.00 $10,670.40Edward J. Eads $130.00 0.70 $91.00 $81.90Catherine L. Reese $150.00 1.30 $195.00 $175.50 Totals 62.20 $24,702.00 $22,231.80

36. General (-999). This matter number is used for general non-labor work

performed by O’Melveny for US Airways. Under this matter number, during the Second

Application Period, O'Melveny recorded its work reviewing various financing documents and

leases for US Airways regarding Pittsburgh International Airport, advising US Airways

regarding the manner in which the airport had been financed and the rights and obligations of US

Airways under Lease and Use agreements at that airport. Such review and advice required the

review and analysis of all such agreements regarding the airport. In addition, O’Melveny

recorded under this matter number counseling it performed for US Airways on various antitrust

and consent decree compliance matters.

-24-

Name Hourly Rate



Suzanne Rich Folsom $410.00 1.00 $410.00 $369.00Neil K. Gilman $390.00 0.50 $195.00 $175.50Neil K. Gilman $410.00 0.80 $328.00 $295.20Chris A. Hollinger $485.00 0.20 $97.00 $87.30Tom A. Jerman $600.00 1.30 $780.00 $702.00Jeffrey I. Kohn $630.00 0.70 $441.00 $396.90Charles C. Lifland $565.00 0.10 $56.50 $50.85Robert A. Siegel $600.00 1.00 $600.00 $540.00Stephen J. Stern $620.00 2.10 $1,302.00 $1,171.80Stephen J. Stern $660.00 0.30 $198.00 $178.20Henry C. Thumann $660.00 1.40 $924.00 $831.60Henry C. Thumann $680.00 12.90 $8,772.00 $7,894.80Catherine L. Reese $150.00 1.60 $240.00 $216.00Esdras A. Tayco Jr. $180.00 23.70 $4,266.00 $3,839.40 Totals 47.60 $18,609.50 $16,748.55

37. Philip Garland v. US Airways, Inc. (-541). Prior to the Petition Date,

Philip Garland filed a lawsuit in federal court in the Western District of Pennsylvania against US

Airways claiming discrimination based on his race. Garland subsequently filed a Motion for

Relief to Modify Automatic Stay and Declaratory Judgment. In December 2002, the District

Court entered an order granting the motion to dismiss the FAA defendants. In the same order,

the Court entered an order dismissing, without prejudice, the claims as to US Airways.

O'Melveny reviewed the Court's order and, together with US Airways, analyzed various

strategies and determined to pursue dismissal of the claims as against the Individual Defendants.

In March 2003, O'Melveny researched and drafted a Motion for Judgment on the Pleadings or in

the alternative a Motion for Summary Judgment.

Name Hourly Rate



Tom A. Jerman $540.00 0.60 $324.00 $291.60Tom A. Jerman $600.00 1.10 $660.00 $594.00Heejung Son $320.00 44.60 $14,272.00 $12,844.80

-25-

Kathleen K. Tremblay $390.00 1.20 $468.00 $421.20Alison B. Muhlfeld $125.00 4.00 $500.00 $450.00 Totals 51.50 $16,224.00 $14,601.60

38. Mid Atlantic (-561). This matter involves legal services that O’Melveny

has provided US Airways in connection with the regulatory re-certification of MidAtlantic

Airways, a wholly owned subsidiary of US Airways Group, Inc. O’Melveny drafted and

prepared the certification application for MidAtlantic, advised the Company on the certification

process and the regulatory requirements at DOT, consulted with the Company on supporting

materials for the certification process, and advised the Company generally on regulatory issues

involving MidAtlantic’s creation, organization, and proposed operations.

Name Hourly Rate



Donald T. Bliss $600.00 0.40 $240.00 $216.00Donald T. Bliss $600.00 0.10 $60.00 $54.00Joel Burton $600.00 12.40 $7,440.00 $6,696.00Joel Burton $600.00 1.00 $600.00 $540.00Patrick Rizzi $390.00 3.70 $1,443.00 $1,298.70Patrick Rizzi $390.00 0.70 $273.00 $245.70 Totals 18.30 $10,056.00 $9,050.40

39. DiSpigno, et al. v. Shuttle, Inc., US Airways, Inc., and Int’l Assn. of

Machinists and Aerospace Workers (IAM) (-355). During the Second Application Period, to

complete a settlement agreed to prior to the Petition Date, O’Melveny had primary responsibility

for revising and finalizing a global settlement agreement and individual releases for 25 plaintiffs,

as well as a stipulation of dismissal. O’Melveny also coordinated the final negotiations over the

terms of the settlement agreement and releases, and coordinated with US Airways regarding

those terms, including providing normal retiree travel privileges to the plaintiffs as such

privileges are currently provided to retirees of the US Airways Shuttle. Pursuant to the terms of

-26-

the settlement agreement, all defendants, including US Airways and Shuttle, were dismissed with

prejudice.

Name Hourly Rate



Jeffrey I. Kohn $610.00 4.90 $2,989.00 $2,690.10Jeffrey I. Kohn $630.00 2.20 $1,386.00 $1,247.40Shari P. Steinberg $350.00 8.20 $2,870.00 $2,583.00Shari P. Steinberg $370.00 5.40 $1,998.00 $1,798.20Gregory J. Millan $60.00 1.20 $72.00 $64.80 Totals 21.90 $9,315.00 $8,383.50

40. Kostas, Konstantine EEOC Complaint (-567). Prior to the Petition Date,

Konstantine Kostas filed a charge of discrimination with the EEOC alleging race discrimination.

O’Melveny promptly prepared and filed a letter informing the EEOC of US Airways’ bankruptcy

proceedings and the automatic stay. O’Melveny also responded to the EEOC’s follow-up

inquiry regarding the automatic stay through its own research and by conferring with co-counsel.

In addition, O’Melveny prepared to and began drafting a position statement in response to

Kostas’ charge.

Name Hourly Rate



Evelyn L. Becker $420.00 6.00 $2,520.00 $2,268.00Heejung Son $320.00 11.90 $3,808.00 $3,427.20 Totals 17.90 $6,328.00 $5,695.20

41. Kimberley A. Payne v. US Airways, Inc. (-307). Prior to the Petition

Date, Kimberley Payne filed a charge with the Vermont Attorney General’s Office for workers’

compensation retaliation and sex discrimination. Per an agreement with the Vermont Attorney

General to discontinue the action, US Airways agreed to undertake a training program. During

-27-

the Second Application Period, with the assistance of Vermont local counsel, O'Melveny

prepared and conducted a training program at the Burlington Station. In addition, O'Melveny

consulted with the Vermont Attorney General's Office to seek approval of the substance of the

training, per the settlement agreement, and O'Melveny informed the Vermont Attorney General's

Office that the training had been conducted.

Name Hourly Rate



Jeffrey I. Kohn $630.00 0.70 $441.00 $396.90Elizabeth Seabury $410.00 12.50 $5,125.00 $4,612.50 Totals 13.20 $5,566.00 $5,009.40

42. Phillip Frazier v. Sedgwick Claims Management, Inc. (-571). On

November 13, 2002, Phillip Frazier filed a lawsuit in San Diego Superior Court for employment

discrimination and various Workers Compensation claims based on allegations of prepetition

conduct. His claim was filed against US Airways and Sedgwick Claims Management, Inc.

O’Melveny filed a Suggestion of Bankruptcy with the Superior Court on November 20, 2002.

O’Melveny reviewed and analyzed Plaintiff’s request for a temporary restraining order and

preliminary injunction, and prepared for and specially appeared at the hearing on those requests.

Following the hearing, Plaintiff voluntarily dismissed US Airways on December 9, 2002 without

prejudice. Sedgwick Claims Management, Inc. filed a demurrer as to causes of action asserted

against it, and the demurrer was granted with prejudice.

Name Hourly Rate



Jin-Sook Lee $210.00 2.00 $420.00 $378.00Brent North $355.00 10.30 $3,656.50 $3,290.85Robert A. Siegel $600.00 2.30 $1,380.00 $1,242.00 Totals 14.60 $5,456.50 $4,910.85

-28-

43. Check Airman RIF (-573). In January 2003, O’Melveny advised US

Airways in connection with a potential arbitration involving a challenge by the Air Line Pilots

Association to a reduction in force among check airmen. In doing so, O’Melveny conferred with

members of US Airways’ legal and labor relations departments, and prepared for the potential

arbitration.

Name Hourly Rate



Tom A. Jerman $600.00 7.10 $4,260.00 $3,834.00 Totals 7.10 $4,260.00 $3,834.00

44. Stephen J. Heckler v. US Airways (-574). During the Second Application

Period, O’Melveny handled the preliminary investigation regarding this new claim of

discrimination filed with the Connecticut Human Rights Organization. The claim was brought

by an employee who left the company in January 2003. O’Melveny reviewed documents and

consulted with US Airways regarding a response to the claim.

Name Hourly Rate



Eric Hoffman $270.00 1.80 $486.00 $437.40Jeffrey I. Kohn $630.00 2.40 $1,512.00 $1,360.80Elizabeth Seabury $410.00 2.50 $1,025.00 $922.50 Totals 6.70 $3,023.00 $2,720.70

45. IAM Organizing Drive (Inflight Trainers/Ground Instructors) (-557).

Prior to the Petition Date, the International Association of Machinists & Aerospace Workers,

(“IAM”) filed an application with the National Mediation Board (“Board”) pursuant to the

Railway Labor Act, seeking to represent personnel described as US Airways “Inflight Training

Specialists/Ground Instructors.” During the investigation, some of which was conducted post-

-29-

petition, US Airways argued that Inflight Training Specialists do not constitute a separate craft or

class, but rather are part of the craft or class of Office Clerical Employees. In December of

2002, the Board issued its ruling denying US Airways’ Motion for Reconsideration of the

Board’s decision that the proper craft or class is Inflight Training Specialists. During the Second

Application Period, O'Melveny reviewed the Board's decision and assisted US Airways in

preparing for the election by analyzing the list of eligible voters and addressing inconsistencies

with the list of eligible voters with the Board.

Name Hourly Rate



Tom Jerman $540.00 2.60 $1,404.00 $1,263.60Tom Jerman $600.00 0.20 $120.00 $108.00Kathleen Kelly Tremblay $375.00 2.80 $1,050.00 $945.00Kathleen Kelly Tremblay $390.00 0.80 $312.00 $280.80 Totals 6.40 $2,886.00 $2,597.40

46. Haines Appeal to Pilot Retirement Board (-442). Prior to the Petition

Date, retired Captain Wayne D. Haines raised a claim regarding his pension benefits that was

before the US Airways Pilots Retirement Board of Adjustment and a neutral arbitrator as of the

Petition Date. During the Second Application Period, O’Melveny handled executive session

scheduling issues and provided the client with an analysis of the arbitrator’s decision rejecting

the claim.

Name Hourly RateTotal Hours

Billed Fees IncurredFees Billed After

10% Discount Karen M. Wahle $425.00 5.00 $2,125.00 $1,912.50Rachel A. Shapiro $320.00 0.50 $160.00 $144.00 Totals 5.50 $2,285.00 $2,056.50

-30-

47. Janice Egri v. US Airways, Inc. (-270). Prior to the Petition Date, Janice

Egri filed a lawsuit in the United States District Court for the District of Vermont for sex and

disability discrimination. During the Second Application Period, O'Melveny conferred with

Vermont workers' compensation counsel concerning a global settlement of the pending workers'

compensation case and this lawsuit. O'Melveny has reviewed and revised the proposed

settlement agreement and has advised US Airways concerning settlement of this lawsuit.

Name Hourly Rate



Jeffrey I. Kohn $630.00 1.60 $1,008.00 $907.20Elizabeth Seabury $410.00 2.70 $1,107.00 $996.30 Totals 4.30 $2,115.00 $1,903.50

48. Timothy B. Nelson v. US Airways, Inc. (-311). Prior to the Petition Date,

Timothy B. Nelson filed a lawsuit in the Eastern District of Pennsylvania for disability

discrimination. The stay in this matter was partially lifted, and O’Melveny worked with

bankruptcy counsel and opposing counsel to assess the status of the case, and drafted a status

update letter to the district court. O’Melveny also analyzed the court’s response to the status

letter.

Name Hourly Rate



Tom A. Jerman $540.00 0.40 $216.00 $194.40Rachel A. Shapiro $320.00 2.80 $896.00 $806.40Rachel A. Shapiro $370.00 0.40 $148.00 $133.20 Totals 3.60 $1,260.00 $1,134.00

49. Darla Maffei v. US Airways (-117). Prior to the Petition Date, Darla

Maffei filed a lawsuit in the Superior Court of Providence, Rhode Island for sex discrimination.

-31-

During the Second Application Period, O’Melveny, working with local counsel, continued to

review the procedural status of this case (which has been handled for the past 10 years by local

counsel) and to assess whether actions needed to be taken. O’Melveny consulted with US

Airways regarding the case status.

Name Hourly Rate



Jeffrey Kohn $630.00 1.80 $1,134.00 $1,020.60 Totals 1.80 $1,134.00 $1,020.60

50. Ronald and Eloney Pierce v. US Airways (-527). This matter involves a

national origin discrimination complaint filed before the Petition Date. US Airways succeeded

in obtaining dismissal of the case in district court on Railway Labor Act Preemption grounds.

Plaintiffs appealed to the Fourth Circuit. During the Second Application Period, O’Melveny

received and reviewed the Court’s order for oral argument, and after conferring and reviewing

relevant rules, drafted a Suggestions of Bankruptcy to the Fourth Circuit.

Name Hourly Rate



Cliff H. Fonstein $525.00 1.60 $840.00 $756.00Tom A. Jerman $600.00 0.30 $180.00 $162.00 Totals 1.90 $1,020.00 $918.00

51. Duane Spagnuolo v. US Airways (-476). In 2001, plaintiff, a US Airways

Passenger Service Agent, filed a disability discrimination claim with the Massachusetts

Commission Against Discrimination ("MCAD"). During the Second Application Period,

O’Melveny handled correspondence from the MCAD regarding a proposed garnishment order,

and responded to the correspondence. O’Melveny also consulted with US Airways regarding

this matter.

-32-

Name Hourly Rate



Jeffrey I. Kohn $630.00 1.00 $630.00 $567.00 Totals 1.00 $630.00 $567.00

52. Kevin Prewitt EEOC Charge (-498). Prior to the Petition Date, Kevin

Prewitt filed an EEOC charge against US Airways alleging that he was discriminated against

because of his race. During the Second Application Period, O’Melveny conferred with US

Airways, analyzed Proof of Claim information, and drafted correspondence to the EEOC

regarding the status of the claim.

Name Hourly Rate



Evelyn L. Becker $420.00 1.40 $588.00 $529.20 Totals 1.40 $588.00 $529.20

53. Barnett v. US Airways (-385). Prior to the Petition Date, Robert Barnett

filed a lawsuit in the Northern District of California for disability discrimination. During the

Second Application Period, O’Melveny considered issues arising out of the automatic stay. In

addition, O’Melveny prepared for and conducted telephone conferences with opposing counsel

and the court’s chambers regarding status conferences.

Name Hourly Rate



Dipanwita Amar $390.00 1.20 $468.00 $421.20Robert E. Winter $390.00 0.30 $117.00 $105.30 Totals 1.50 $585.00 $526.50

-33-

54. Philadelphia Fuel System Financing (-445). In this matter, O'Melveny

advised US Airways regarding a possible bond financing, the proceeds of which were to be used

to modernize the fueling system at Philadelphia International Airport. Because the transaction

did not go forward, O'Melveny dissolved a corporation created for the project. During the

Second Application Period, O’Melveny reviewed statutes and background materials regarding

inactive corporations, and drafted and filed a Certificate of Dissolution Before Beginning

Business.

Name Hourly Rate



Joyce J. Ono $200.00 2.60 $520.00 $468.00 - Totals 2.60 $520.00 $468.00

55. DOT Proceedings – British/American Alliance (-181). This matter

involves legal services that O’Melveny has provided US Airways in connection with the

proposed codeshare agreement between American Airlines and British Airways. Specifically,

O’Melveny reviewed the regulatory pleadings filed in connection with the most recent version of

the agreement, prepared memoranda summarizing their contents, and advised US Airways of the

agreement’s potential impact.

Name Hourly Rate



Benjamin Bradshaw $355.00 0.90 $319.50 $287.55Patrick R. Rizzi $390.00 0.40 $156.00 $140.40 Totals 1.30 $475.50 $427.95

56. Phillip Garland Termination Grievance (-548). Prior to the Petition Date,

Philip Garland filed a grievance for breach of the applicable collective bargaining agreement and

for discrimination on the basis of his race, which was arbitrated. The US Airways Pilot System

-34-

Board of Adjustment issued a decision in the matter in favor of US Airways and against Mr.

Garland. During the Second Application Period, O’Melveny conferred with US Airways and

reviewed and analyzed the decision.

Name Hourly Rate



Tom A. Jerman $600.00 0.70 $420.00 $378.00 Totals 0.70 $420.00 $378.00

57. Dolores de Aguirre v. U.S. Airways, Inc. (-572). On November 12, 2002,

Dolores de Aguirre filed a lawsuit in the Superior Court of the State of California in San Diego

alleging discrimination based on disability. Following O’Melveny’s filing of a suggestion of

bankruptcy, in the Second Application Period O'Melveny appeared before the Superior Court

Judge for a Case Management Conference regarding the automatic stay of the action.

Name Hourly Rate



Jin-Sook Lee $210.00 0.80 $168.00 $151.20Jin-Sook Lee $280.00 0.80 $224.00 $201.60 Totals 1.60 $392.00 $352.80

58. Pilot Hiring Issues (-175). This matter involves a Supplemental Consent

Decree between US Airways and Office of Federal Contract Compliance Programs (“OFCCP”)

arising out of a 1988 Administrative Complaint alleging that a US Airways predecessor

discriminated against a class of flight attendants and pilots based on race. During the Second

Application Period, O’Melveny drafted a motion for extension of time with the Administrative

Law Judge.

-35-

Name Hourly Rate



Evelyn J. Becker $390.00 1.00 $390.00 $351.00 Totals 1.00 $390.00 $351.00

59. Ackerman v. Fortis (Subpoena Response) (-456). This matter involved a

suit for bad-faith denial of benefits brought against Fortis Life Insurance Co., the carrier selected

by US Airways, Inc. to insure long-term disability benefits to certain of its employees in the

1990's. In December 2002, the Court issued an Order deciding the dispute over whether the

long-term disability plan at issue was covered by the Employee Retirement Income Security Act

of 1974 ("ERISA"), which is relevant to the question of whether the state law claims asserted by

plaintiff are preempted. During the Second Application Period, O’Melveny reviewed the

opinion, discussed it with Fortis' counsel, and advised US Airways as to the impact of the

decision on the lawsuit and on the Company's management of its other plans.

Name Hourly Rate



Karen M. Wahle $460.00 0.80 $368.00 $331.20 Totals 0.80 $368.00 $331.20

60. Efren Reyes EEOC Complaint (-507). Prior to the Petition Date, Efren

Reyes filed a charge with the EEOC based on national origin and retaliation. After the Petition

Date, US Airways received notification from the Arlington County Human Rights Commission

(“ACHRC”) that a charge had been cross-filed with that agency and it was proceeding with its

investigation. O’Melveny drafted and filed with the ACHRC a letter informing it of US

Airways’ bankruptcy proceedings and the automatic stay of litigation. In addition, O’Melveny

prepared for ACHRC’s investigation of Reyes’ charge and conducted employee interviews.

-36-

Name Hourly Rate



Heejung Son $320.00 0.80 $256.00 $230.40 Totals 0.80 $256.00 $230.40

61. Conclusion. The legal services rendered by O’Melveny were substantial,

highly professional, and extremely beneficial to these estates. The compensation sought by

O’Melveny is for actual, necessary services rendered and is eminently reasonable. All of the

factors typically considered in determining compensation — complexity, results achieved,

special expertise, magnitude of the matter and professional standing — compel the conclusion

that the compensation for which O’Melveny seeks interim and final approval is fair and

reasonable.

VI. PREPARATION OF FEE APPLICATION

62. O’Melveny estimates that it has expended approximately 155 hours and

incurred approximately $32,000 in fees in preparation of this Application. O’Melveny expended

230.3 hours and incurred approximately $52,037.55 in fees in preparation of the First Interim

Application. As noted above, because O’Melveny estimated in its First Interim Application that

incurred approximately $37,800.00 in fees in preparation of the First Interim Application,

O’Melveny is voluntarily writing-off the difference between the estimated and actual fees in the

amount of $14,237.55.

VII. LIST OF EXPENSES

63. In connection with its representation of the Debtors during the Second

Application Period, O’Melveny advanced necessary expenses totaling $95,811.57. A detailed

description of expenses incurred during the case is attached hereto as Exhibit “D.”

64. O’Melveny requests reimbursement for expenses including costs advanced

for court services, telecopies, computerized research, delivery services, photocopies, long

-37-

distance phone calls, fees associated with ongoing litigation, travel and other costs necessarily

incurred in connection with its representation of the Debtors. O’Melveny made every effort to

limit expenditures and to use the most economical means available for accomplishing the tasks

requiring such expenditures.

65. Of the expenses, copying charges total $4,421.40. O’Melveny’s standard

in-house charge for photocopying is $0.15 per page, which is also the charge for non-bankruptcy

clients generally. US Airways, however, are charged only $0.10 per page for photocopying.

66. O’Melveny also incurred costs for sending correspondence regarding the

case. O’Melveny charges $1.25 per page for outgoing telecopies plus long distance phone

charges, if applicable, but does not charge for incoming telecopies. US Airways, however, have

not been charged for long distance phone charges associated with telecopies. O’Melveny

attempted to avoid overnight delivery expenses and unnecessary telecopying whenever possible.

67. In addition to the above expenses, O’Melveny incurred expenses in

connection with the travel of its attorneys to meetings and hearings before this Court in

Alexandria, and in connection with travel from its office in Los Angeles for meetings with the

client and local Washington area attorneys at the client’s request. These airfare and noted travel-

related expenses were $17,465.09.8

VIII. HOURLY RATES

68. The hourly rates of all professionals and legal assistants rendering services

in this case for the Applicable Period, including rate adjustments effective January 1, 2003, are

set forth in Exhibit “C”. O’Melveny submits that these rates are reasonable and within the range

of customary rates in the Eastern District of Virginia for professionals of similar experience and

expertise. Exhibit “C” also sets forth the year of admittance to each attorney’s bar, the number

of hours billed during the Second Application Period, and the total fees attributable to each

8 As shown in Exhibit “D,” this figure includes $3,371.87 for travel expenses, $272.65 for meals while on travel, $1,011.57 in local travel, including taxicab travel to and from the client and court, and $12,809.00 in direct bill airfare.

-38-

professional and paraprofessional, as well as other summary information required by the

Guidelines.

69. O’Melveny sought to control its fees by administering the case efficiently

and coordinating the efficient prosecution of matters. Staffing of matters within the case was

done with the intent to provide the optimal level of representation given the importance and

complexity of a particular matter, and to avoid duplication of other professionals efforts,

including those of bankruptcy counsel Skadden, Arps, Slate, Meagher & Flom (Illinois).

IX. DESCRIPTION OF PROFESSIONAL EDUCATION AND EXPERIENCE

70. The biographies of the primary attorneys employed by O’Melveny who

rendered services in this case are attached as Exhibit “F”.

X. NO SHARING OF COMPENSATION

71. No agreement has been made, directly or indirectly, and no understanding

exists, for a division of compensation herein between O’Melveny and any other person or

persons, contrary to any applicable provisions of the Bankruptcy Code, the Bankruptcy Rules,

the local rules or state law.

XI. COMPLIANCE WITH GUIDELINES OF THE UNITED STATES TRUSTEE.

72. As set forth in the Certification of Robert A. Siegel With Respect To

Second Interim Application Of O’Melveny & Myers LLP For Order Authorizing And Approving

Compensation And Reimbursement Of Expenses (attached hereto as Exhibit “G”), O’Melveny

has complied fully with the Guidelines, to the extent applicable.

XII. NOTICE OF THIS SECOND INTERIM APPLICATION

73. Notice of the Application has been given to the Debtors, as well as to the

Debtors’ postpetition lenders, counsel to the Creditors Committee, and the United States Trustee

by McGuireWoods LLP on behalf of O’Melveny and others pursuant to the Amended Order

Pursuant to 11 U.S.C. §§102 and 105(a), Bankruptcy Rules 2002(m) and 9007, and Local

-39-

Bankruptcy Rules 2002-1 and 9013-1 Establishing Omnibus Hearing Dates and Certain Notice,

Case Management and Administrative Procedures (Docket No. 88). Complete copies of this

Application were also served upon the parties required by the Administrative Order. Complete

copies of this Application also will be promptly furnished to any other party upon specific

request. A copy of the notice given in connection with this Application is being filed with the

Court.

XIII. CONCLUSION

WHEREFORE, O’Melveny respectfully requests the entry of an order (a) finally

allowing all compensation and reimbursement of all expenses requested by O’Melveny in the

Chapter 11 cases, and (b) authorizing and directing O’Melveny to apply the retainer to payment

of the Holdback and any remaining unpaid disbursements for the First and Second Application

Periods and permitting O’Melveny to apply any balance of the retainer to future fees and

expenses, and granting such other and further relief consistent herewith as this Court may deem

just and proper.

DATED: May 30, 2003 ROBERT A. SIEGEL Pro Hac Vice

TOM A. JERMAN, Pro Hac Vice O’MELVENY & MYERS LLP

By /s/ Robert A. Siegel Robert A. Siegel

Attorneys for US Airways Group, Inc., et al., Debtors and Debtors in Possession

Date post:	09-Apr-2019
Category:	Documents
Upload:	dinhphuc
View:	214 times
Download:	0 times

Robert A. Siegel Tom A. Jerman O’MELVENY & MYERS LLP th...

Documents