With the global capital markets nearly in a coma, companies are looking at all their options for boosting liquidity. For the airline industry, it appears, their current favored option for raising money has been so-called continuous offering programs.

The latest airline to pull off such a deal is Delta Air Lines Inc., taking legal advice from Kilpatrick Stockton partner Ben Barkley. On Dec. 17, Delta announced plans to sell up to 18.2 million shares of its common stock in a continuous offering program. Based on the stock’s price the day the sale was announced, it would raise up to $200 million for Delta.

Citigroup Global Markets is underwriting the stock sale, with legal advice coming from Shearman & Sterling partner Abigail Arms in Washington.

Kilpatrick Stockton has had a relationship with Delta for a number of years, although most of its work had not been in the corporate area, Barkley said. Barkley worked with Delta General Counsel Richard B. Hirst, who was previously general counsel of Northwest Airlines Corp. Delta and Northwest completed their merger on Oct. 29.

These types of stock sales are called different things by different investment banks. Citigroup prefers the term “continuous offering program,” but Merrill Lynch called a similar transaction it’s conducting for AMR Corp.’s American Airlines an “ATM Equity Offering Sales Agreement.” ATM stands for “at the market,” Barkley said.

UAL Corp.’s United Airlines and Continental Airlines each have also recently launched similar continuous stock offerings, Barkley said.

In these types of stock sales, the underwriter sells new stock in the open market on a daily basis, according to Delta’s prospectus. The size of each day’s stock sale depends on the market’s performance. Delta won’t receive a large cash infusion, as it would from a single-day securities offering. But Delta will benefit from not flooding the market with its shares, which could potentially increase Delta’s stock volatility.

Delta will receive a daily report from Citigroup on how that day’s stock sales went.

“Citi will provide to us written confirmation following the close of trading on the [New York Stock Exchange] each day in which shares of common stock are sold by it for us under the equity distribution agreement. Each confirmation will include the number of shares sold on that day, the gross sales price per share, the net proceeds to us and the compensation payable by us to Citi,” Delta said in its prospectus.

Delta plans to use the proceeds from its continuous offering program to “replace funds that were used to pay the employee portion of withholding taxes on the issuance and vesting of equity awards made to our employees in connection with our merger with Northwest” Airlines, according to a regulatory filing.

During its efforts to secure economic incentives for its $1 billion manufacturing plant near Chattanooga, Volkswagen AG steered legal questions to Balch & Bingham partner Alex Leath.

Now the question becomes, what law firm will the German auto giant pick as its regular outside counsel for future matters in the U.S.? Balch is a contender for the prize assignment, Leath said. Chattanooga-based Miller & Martin is also bidding on the VW job, according to attorneys familiar with the law firm's plans.

Additionally, lawyers are also scrambling to represent other local governments in Tennessee, Georgia and Alabama that wish to lure suppliers that want to locate near VW’s first U.S.-based manufacturing plant, Leath said.

Leath, who is based in Birmingham, Ala., is not a newcomer to this type of legal work. Leath’s resume includes a stint advising the state of Alabama on negotiating incentives with Mercedes-Benz for a plant in Vance, Ala.; and another project advising Toyota on its plans for an assembly facility in Mississippi. His clients have also included Boeing, Northrop Grumman and General Motors.

“Probably no lawyer in the Southeast has benefited from the re-industrialization of the South more than the one you’re talking to,” said Leath [photo, right].

In addition to the winning site in southeastern Tennessee, VW also looked at sites in Alabama and Michigan. Leath advised VW on the site-selection process and has continued advising VW on implementing its economic-incentive package and on negotiating details on construction agreements.

Among the incentives is a payment-in-lieu-of-taxes agreement, in which Volkswagen has agreed to pay 29.23 percent of its Hamilton County, Tenn. property taxes between 2010 and 2039, according to the Chattanooga Times Free Press. After that, VW will pay 100 percent of its property tax bill.

VW’s plant will be located at the 1,300-acre Enterprise South industrial park east of Chattanooga. The 1.9 million-square-foot plant will build mid-sized sedans for the North American market, is expected to employ about 2,000 people, and is projected to begin operations in 2011, according to the Times Free Press.

Leath led a team of about 45 lawyers from Balch in a slew of practice areas, including environmental, real estate, labor and employment, corporate, tax, utilities, and railroad and trucking regulations. The Balch lawyers were spread out among the firm’s offices in Birmingham and Montgomery, Ala., and in Jackson, Miss.

Other attorneys who were involved in the economic-benefits package offered to VW, according to Leath, include: Miller & Martin partner Evan Allison in Chattanooga, who advised Hamilton County on real estate issues; Hamilton County Attorney Rheubin Taylor; Tennessee Department of Economic & Community Development General Counsel Stephanie Tisdale; and Chattanooga City Attorney Randy Nelson.

The U.S. airline industry has been rocked by high fuel prices and decreased demand from business and pleasure travelers who are cutting back on spending during the recession.

Just this week, Delta Air Lines Inc. announced it would cut seating capacity by as much as 8 percent next year.

The airline industry’s woes, however, haven’t completely iced the market for the acquisition and leasing of new aircraft. Smith, Gambrell & Russell partner Don Mitchell last month advised a subsidiary of CIT Group Inc. on leasing two new aircraft to Compañía Mexicana de Aviación SA de CV, better known as the airline Mexicana.

Mexicana will lease from CIT Aerospace two Airbus A330-200s for 10 years each. Financial terms of the leases weren’t disclosed. The new planes will enable Mexicana to launch a new daily flight to Madrid from its hub airport in Mexico City, Mitchell said.

The two Airbus aircraft had originally been ordered by British carrier XL Airways. But that airline went bust in September, freeing up the two Airbus planes for another airline to lease. There was “significant interest” from other airlines in addition to Mexicana in leasing the planes, Mitchell said.

“The market is not robust, but there are opportunities,” Mitchell said.

While many U.S. airlines are shrinking their fleets, international airlines continue to take new deliveries, Mitchell said. Middle East airlines, such as Emirates Airline, are especially active in taking new deliveries, he said.

CIT Aerospace is leasing the planes to Mexicana through operating leases, an increasingly popular method of aircraft finance, Mitchell said. Before the market crash this fall, most airlines acquired planes aircraft through debt financing. But with financing now more difficult to obtain, operating leases are gaining in popularity, although primarily outside the U.S., Mitchell said.

A Georgia state senator who controls two auto dealerships has tapped his longtime outside law firm—Segal, Fryer, Shuster & Lester—for advice on an offer to acquire a dealership from the bankrupt Bill Heard Enterprises Inc.

Michael Shuster, a partner at the Atlanta firm, is advising a company controlled by State Sen. Emanuel Jones on his offer to buy a former Bill Heard dealership in Columbus. The company, called Legacy Automotive of Columbus LLC, made its offer in the U.S. Bankruptcy Court for the Northern District of Alabama, where Bill Heard’s Chapter 11 case was filed.

Legacy’s offer is valued at least $12.5 million, and will ultimately be significantly higher than that, Shuster said. That figure includes an offer of $11.5 million for the dealership’s real estate, and another $1 million for furniture, fixtures and equipment at the dealership. However, Legacy is also offering to acquire two other sets of assets—the dealership’s inventory of new vehicles and its inventory of automobile parts. The value of those inventories has yet to be determined, Shuster said.

Shuster said he has been representing Jones since he entered the automobile dealership industry in 1991. Segal, Fryer, Shuster & Lester partner Charles I. Pollack is also advising Legacy on the real estate aspects of its acquisition offer.

Legacy had previously made an offer to acquire Bill Heard’s shuttered dealership in Gwinnett County. But that offer was withdrawn earlier this month.

Jones, a Democrat from Ellenwood, owns two dealerships in Henry County, Legacy Ford and Legacy Hyundai, both in McDonough. Jones was elected to the Georgia Senate in 2004.

Legacy’s offer for the Columbus dealership is classified as a “stalking horse” bid in bankruptcy court filings. That means Bill Heard is required to solicit other offers, and Legacy could be out-bid, Shuster said. Additionally, Legacy’s offer must receive final approval from both the U.S. Bankruptcy Court and from General Motors Corp., which holds an existing franchise agreement with Bill Heard.

Bids are also outstanding on two other Bill Heard dealerships, in Collierville, Tenn., and Huntsville, Ala.

Before filing for bankruptcy and closing all its dealerships in September, Bill Heard Enterprises was one of the largest Chevrolet dealers in the U.S.

Burr & Forman partners Robert Rubin and Derek Meek in Birmingham, Ala., are lead bankruptcy counsel to Bill Heard Enterprises. Kilpatrick Stockton partners Dennis Meir and John Mills in Atlanta and Mark Taylor in Washington are advising the official committee of unsecured creditors.

Paul, Hastings, Janofsky & Walker partner Jesse Austin is representing a group of lenders—including UBS and General Electric Capital—on providing financing to a Texas-based trucking company that filed for bankruptcy this week.

Austin, a financial services and restructuring partner in Paul Hastings’ Atlanta office, specializes in debtor-in-possession lending, according to the law firm’s web site.

The trucking industry has been hit hard [see Deal Watch Blog story from Oct. 10] by a variety of factors, including a rise in fuel costs and declines in shipments by retailers and automakers. A number of trucking companies have filed for bankruptcy this year, including Jevic Holding Corp. and Jim Palmer Trucking.

GWLS Holdings Inc.’s Greatwide Logistics Services filed for Chapter 11 protection on Monday in U.S. Bankruptcy Court for the District of Delaware. Greatwide is financing its daily operations with debtor-in-possession lending of as much as $73.6 million from UBS, GE Capital and Abelco Finance LLC, according to a court filing. Paul Hastings is advising UBS, GE Capital and Abelco.

Greatwide, of Dallas, operates dozens of subsidiaries engaged in freight trucking, logistics and brokerage industries. The company’s customers include Wal-Mart, Ford Motor, General Motors and UPS, according to Greatwide’s web site.

As part of its Chapter 11 filing, Greatwide said that it has agreed to sell itself to two private equity firms, Centerbridge Capital Partners LP and D.E. Shaw & Co., according to a press release. Other companies will be allowed to make higher offers during the bankruptcy procedure, Greatwide said.

Among Greatwide’s largest creditors are Comdata Corp. of Birmingham, Ala., and Atlanta, owed an estimated $2.5 million in trade debt; Ryder Transportation Services of Atlanta, owed an estimated $200,000; and Great Dane Trailers of Atlanta, owed $52,000.

Willkie Farr & Gallagher and Young, Conaway, Stargatt & Taylor are bankruptcy co-counsel to Greatwide. Paul Hastings partner Leslie Plaskon in New York is working with Austin on advising the DIP lenders.

Kilpatrick Stockton partner John Mills in Atlanta is representing Mitsubishi Motors Credit of America Inc. in the bankruptcy case of a South Carolina car dealer.

Joe Gibson Automotive Inc. of Spartanburg, S.C., on July 16 filed for Chapter 11 protection in U.S Bankruptcy Court for the District of South Carolina. Joe Gibson Automotive filed for bankruptcy after dozens of consumers sued the dealer, claiming fraudulent advertising and business practices.

Mitsubishi Motors Credit is a secured lender in the case, having provided financing to Joe Gibson to purchase vehicles. Mitsubishi Motors Credit is owed about $1.86 million by Joe Gibson Automotive, according to court documents.

McCarthy Law Firm partner Bill McCarthy and Walker & Reibold partner Harry Walker, both of Columbia, S.C., are representing Joe Gibson Automotive.

Joe Gibson Automotive operated Mitsubishi and Suzuki dealerships in Spartanburg and Gaffney, S.C. The largest dealership in Spartanburg closed on Aug. 2, according to the Herald-Journal of Spartanburg.

Truckers portray themselves as the last American cowboys. Apparently, trucking companies also think of themselves as mavericks, at least when it comes to hiring lawyers.

A large majority of motor-carrier companies in the U.S. flock not to New York or Washington when they need legal advice on corporate, insurance, regulatory and litigation-defense matters. Instead, they seek out two firms – one located in the Crossroads of America, and another located in the Great Plains.

“We’re in Indiana, which is called the Crossroads of America, and that’s an appropriate location for our law firm,” said Gregory M. Feary, managing partner of Scopelitis, Garvin, Light, Hanson & Feary. “More than 90 percent of our revenue comes from trucking companies. We have 22 practice areas and all devoted to their areas of law as they are applied to the trucking industry.”

Scopelitis Garvin employs 56 lawyers, most located in Indianapolis, but the firm also has offices in Chicago, Detroit, Kansas City, Los Angeles and Washington. Its clients include Schneider National Inc. of Green Bay, Wisc., the largest privately owned truckload carrier; and YRC Worldwide Inc., the parent company of Yellow Transportation and Roadway Express.

The other firm—Scudder Law Firm PC of Lincoln, Nebraska—is much smaller than Scopelitis Garvin but it also derives the bulk of its revenue from trucking companies. Scudder’s attorneys focus on mergers-and-acquisitions and securities work.

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The car dealer once known as “Mr. Big Volume” tapped Birmingham law firm Burr & Forman as its lead bankruptcy counsel.

Bill Heard Enterprises Inc. hired Burr partners Derek F. Meek , Marc P. Solomon and Robert B. Rubin of Birmingham, Ala. as lead counsel on its Chapter 11 filing in U.S. Bankruptcy Court for the Northern District of Alabama.

Bill Heard, which had billed itself in advertising as “Mr. Big Volume,” closed all 14 of its dealerships nationwide on Wednesday. Bill Heard, which focused on sales of Chevrolet vehicles, operated four dealerships in metro Atlanta, including Bill Heard Chevrolet of Union City, Ga. and Tom Jumper Chevrolet on Roswell Road in Sandy Springs.

That focus on Chevy products proved to be a lead factor in the dealer’s downfall. Founded in 1919 in Columbus, Ga., where the company continued to maintain its headquarters, Bill Heard grew to become one of the largest Chevy dealers in the U.S. At its peak, the company generated $2.5 billion in yearly sales, according to a court filing.

However, the Chevy product line, which focused on gas-guzzling trucks and SUVs, led to sharply decreased demand amid record-high fuel prices, Bill Heard said in court filings. Banks’ sharp cutbacks in consumer financing also played a significant role in the sales declines. Bill Heard said that earlier this year, it was losing as much as $5 million per month.

Bill Heard filed its petition on Sunday. In the coming days, scores of attorneys will file notices with the bankruptcy court on behalf of creditors and other interested parties. Among the creditors are the State of Georgia, which Bill Heard estimated it owes about $770,000 in sales taxes; the states of Nevada and Texas, sites of large Bill Heard dealerships and also owed back taxes; and Cox Radio and Clear Channel, broadcasting companies that are presumably owed money on for unpaid bills for advertising.

In addition to the Burr attorneys, Hatcher Stubbs Land Hollis & Rothschild partner J. Barrington Vaught of Columbus said he is longtime outside counsel to Bill Heard and continues to represent the company.

Stichter, Riedel, Blain & Prosser partner Edward J. Peterson III of Tampa, Fla., was hired as Bill Heard’s conflicts counsel.

GMAC LLC hired Lightfoot, Franklin & White partner Sara A. Ford in Birmingham and Adorno & Yoss partner Charles M. Tatelbaum in Ft. Lauderdale, Fla. as bankruptcy counsel. GMAC had provided financing to acquire vehicles for a majority of Bill Heard’s dealerships. Bill Heard Enterprises filed a motion to hire GMAC to provide post-petition financing of $6.7 million.

Troutman Sanders partner Jeffrey W. Kelley is representing Columbus Bank & Trust Co., one of Bill Heard’s pre-petition lenders, according to Bill Heard’s certificate of service filed with the bankruptcy court on Monday morning. Holland & Knight partner James H. Rollins is representing BMW Financial Services, which had provided lending for Bill Heard to acquire vehicles for its dealer lots.

With consumers finding it difficult to get credit and the nationwide average price of gasoline at more than $3.60 per gallon, auto dealerships across the country are shutting their doors. In what therefore should not be a surprise, the nation’s largest Hummer dealer just announced that it will close.

Towbin Hummer of Las Vegas will close tomorrow, The Wall Street Journal’s Deal Journal blog reported. It’s at least the eighth Hummer dealer to close this year.

Deal Journal provides an example that makes it plain why consumers aren’t exactly lining up to buy Hummers these days. “With the national average for a price of gas resting at $3.66 a gallon, it costs $84 to fill up Hummer’s smallest model–the H3,” Deal Journal said. “At that price, an H3 owner in Las Vegas could fly to Los Angeles for a roundtrip weekend getaway for about as much as it would cost to drive the H3.”

Auto dealers of all stripes are closing, but especially those that sell U.S.-made cars. The number of new-car dealers in Georgia has declined from 623 in 2005 to 603 this year, according to the National Automobile Dealers Association.

There are at least four Hummer dealers in metro Atlanta, including Bridges Auto Group’s Hummer of Union City.

Dealers are being forced to offer more financial incentives on Hummers than any other car brand, and still they’re not selling, Deal Journal said. U.S. buyers received an average of $8,861 in various incentives for each Hummer sold, the blog said, citing Edmunds.com. In comparison, BMW is offering an average of $84 in incentives for each Mini it sells.

One Atlanta-area Hummer dealer, Lou Sobh Hummer in Duluth, is offering $10,000 off all 2007 versions of the Hummer H2 SUT, according to its Web site.

With gas prices sky-high and credit extremely difficult to obtain, U.S. consumers have decided now isn’t a great time to be spending money on a new car. That’s meant big trouble for car dealers, especially retailers who sell the domestic brands General Motors, Ford and Chrysler.

As a result, dealerships are closing at a rapid rate in metro Atlanta and in the U.S. One lawyer predicts even more will close in the next 12 months to 18 months.

In the Wednesday issue of the Daily Report, corporate lawyers discuss the limited range of legal options available to the owners of struggling auto dealerships. Bankruptcy is rarely an option because of the difficulties in obtaining post-petition financing. It’s not easy to dispose of property, because a dealership’s real estate is often highly leveraged. And, other than publicly traded car dealership companies, there aren’t many dealers that have enough capital to finance an acquisition right now.

One lawyer is advising clients that if have ever seriously considered exiting the car-dealership business, now would be a great time to do so. Read about it here.