artsyman
Posts: 4516
Joined: Wed Feb 28, 2001 12:35 pm

Pbgc Denies DL/NW Bankruptcy Pension Breaks

Fri Sep 16, 2005 2:37 am

Unlike the endless freedoms given to United, the tide has already changed for the others filing.

The PBGC today ruled that unlike United, NW, and Delta will not be allowed to default on their pension payments during chapt 11.

During United's long stint in Chapt 11, they not only managed to avoid making pension contributions, but managed to get rid of the pension more or less completely, yet DL/NW are not being given the same freedoms.

Discuss...

http://biz.yahoo.com/ap/050915/airlines_pensions.html?.v=2

[Edited 2005-09-15 20:02:58]
 
DeltaMIA
Posts: 1622
Joined: Wed Feb 04, 2004 11:53 am

RE: Judge Denies DL/NW Bankruptcy Pension Breaks

Fri Sep 16, 2005 2:40 am

The law should be consistent.
It's a big building with patients, but that's not important right now.
 
FlyPNS1
Posts: 5272
Joined: Wed Dec 01, 1999 7:12 am

RE: Judge Denies DL/NW Bankruptcy Pension Breaks

Fri Sep 16, 2005 2:40 am

Where's this judge you mention? All I see is a quote from a PBGC official...far from a judge.
 
hiflyer
Posts: 1271
Joined: Wed Nov 24, 2004 1:38 am

RE: Judge Denies DL/NW Bankruptcy Pension Breaks

Fri Sep 16, 2005 2:46 am

other bankrupt carriers and companies have their pensions in pbgc so the law for ual was consistent but not popular. dal and nwac are butting up against politics and the fear of right leaning politicians among some judges who are now trying to redefine the rules. will be an interesting argument that will probably rest on the ultimate strength, or lack, of the current administration.
 
Gnomon
Posts: 894
Joined: Thu Jun 03, 1999 12:38 pm

RE: Judge Denies DL/NW Bankruptcy Pension Breaks

Fri Sep 16, 2005 2:52 am

Quoting FlyPNS1 (Reply 2):
All I see is a quote from a PBGC official...far from a judge.

FlyPNS1 is exactly right. The article quotes an official with the PBGC -- not a judge (far from it) -- who is simply expressing the PBGC's determination that the law requires DL and NW to continue their pension payments, absent judicial relief.

Of course, a court order like the one entered in UAL's case could grant DL/NW relief from complying with that law.

But it's far too early for any such court order. A ruling on these pension issues would involve complicated facts and lengthy hearings, which would take a pretty long time. Don't expect anything like that less than 24 hours after DL and NW filed their petitions! Our judicial system tends to be cumbersome and slow-moving, particularly in cases such as these.

That said, when the time comes, if DL and NW can prove they're in the same circumstances as UAL was when it was granted relief, I'd imagine they'd have a pretty easy time getting a similar order.
 
AirRyan
Posts: 2398
Joined: Wed Mar 30, 2005 9:57 am

RE: Judge Denies DL/NW Bankruptcy Pension Breaks

Fri Sep 16, 2005 2:57 am

Nothing has been ruled on as of today hours after each airline files. Now one thing that might hurt DL/NW is that they filed on the same day and the potential is there for one of the two to be lumped with the other in certain legal decisions that they might otherwise not be which could result in less than desirable outcomes for one of them.

I agree - the law has to remain consistent and the bench is not a place to legislate morality despite what some of our bleeding heart pacifist Commie-Liberal "Honors" think to the contrary.
 
Tbird
Posts: 801
Joined: Wed Oct 31, 2001 3:09 am

RE: Judge Denies DL/NW Bankruptcy Pension Breaks

Fri Sep 16, 2005 2:58 am

No where does it say a judge ruled saying that NW and DAL must make pension payments. As others stated the head of Pension Benefit Guaranty Corp simply stated a policy on the books they have. DL and NW still can go to a judge and request the pensions be dropped, they can also simply not pay the next contribution which Delta has indicated it will not pay. More then likely they will be granted a default on their pension plans, its either that or they shut down all together.
 
MD88Captain
Posts: 1224
Joined: Wed Nov 14, 2001 9:50 am

RE: Pbgc Denies DL/NW Bankruptcy Pension Breaks

Fri Sep 16, 2005 5:28 am

Grienstein has said the pension plan is dead if DAL files Chapter 11. Well DAL has filed and there is no way that the pension will not be terminated. The filing papers mention a $10B deficit to the pension plan. That's $10,000,000,000.00 that can be erased in BK. It is a done deal.
 
User avatar
lightsaber
Crew
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Joined: Wed Jan 19, 2005 10:55 pm

RE: Pbgc Denies DL/NW Bankruptcy Pension Breaks

Fri Sep 16, 2005 3:56 pm

Quoting FlyPNS1 (Reply 2):
Where's this judge you mention? All I see is a quote from a PBGC official...far from a judge.

Correct. The PBGC is a creditor like any other. They'll have their vote. Now, its reasonable as a creditor that the PBGC will get stock in the re-emerging NW and DL. Here is a scary thought, the government is going to own a good chunk of the airline industry. Probably 2nd only to GECAS!  grumpy 

The pensions are gone. Probably like UA, NW and DL will have to make one more final cash payment.

All in all, I expect these BK's to go much faster than UA's. But that's not really saying anything!  bigthumbsup 

Lightsaber
"They did not know it was impossible, so they did it!" - Mark Twain