milemaster
Posts: 995
Joined: Tue Mar 20, 2001 10:19 am

Delta Airlines May Have Misused Funds

Thu Dec 08, 2005 5:00 am

Don't shoot the messenger as this hasn't been confirmed.

I hope everything gets cleared up as there are many great people at Delta. Some could argue the best of the best work for Delta... just maybe not in their accounting dept.

Committee Objects to Delta's Use of Disability and Survivor
Trust Funds

NEW YORK, Dec. 6 /PRNewswire/ -- Yesterday, the Official Committee of Delta Retirees filed a motion in the Delta bankruptcy case to end Delta Air Lines' improper use of funds from a separate Disability and Survivors Trust. Delta had spent over $30 million of the Trust funds in the last three years for employee severance benefits, even though the Trust documents prohibited those payments since March 2002.

In a filing during the first week of the bankruptcy, Delta had claimed the Trust was "fully funded," but financials provided since show the Trust has an asset shortfall of more than $212 million. The Committee also raised questions in its motion about Delta's separate amendment of its benefit plans, two days before the bankruptcy, to retroactively authorize $22 million in 2004 payments out of the Trust for active workers' sick pay.

Full Article Here: http://quote.bloomberg.com/apps/news...conews&tkr=DAL:US&sid=apXkt0mG0cyI

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ScarletHarlot
Posts: 4251
Joined: Tue Jul 22, 2003 12:15 pm

RE: Delta Airlines May Have Misused Funds

Thu Dec 08, 2005 5:06 am

This is very interesting. Benefits offered under the D&S plan have been decimated over the past few years. Misusing money out of the trust is a very, very big deal and I hope it gets straightened out.

It is possible for the trust to be both "fully funded" and to also have an asset shortfall. Pension trusts are valued under several different methodologies and it is entirely possible for one formula to show a shortfall and another to show it as fully funded. When a shortfall exists, a series of payments into the trust are set up to fund the trust and this set of payments may be considered in some valuation methods.

I hear that Delta is considering terminating its pension plans. No surprise there, really.
But that was when I ruled the world
 
wjcandee
Posts: 5157
Joined: Mon Jun 05, 2000 12:50 am

RE: Delta Airlines May Have Misused Funds

Thu Dec 08, 2005 5:10 am

Typical headline-grabbing-lawyer posturing. Expect a lot more of this over the next few months. Also, let's lay of the "may have" crap. DL "may" have a pilot's strike. DL "may" liquidate. Delta "may" fly radioactive planes. Delta "may" not even really exist.

Enough already.
 
richierich
Posts: 3289
Joined: Sat Nov 04, 2000 5:49 am

RE: Delta Airlines May Have Misused Funds

Thu Dec 08, 2005 6:03 am

I thought by the title that this may have been another Song thread!  Smile

Seriously, I hope it gets worked out. Its probably being blown out of context due to BK proceedings - everything comes under the microscope and mistakes will be dealt with. These 'mistakes' can happen anywhere.
None shall pass!!!!
 
Lono
Posts: 1136
Joined: Sun Apr 04, 2004 5:47 pm

RE: Delta Airlines May Have Misused Funds

Thu Dec 08, 2005 6:09 am

This could be a big issue especially if DL is guilty of hiding this in order to get B/R loan funding.... this a lot of money to make an accounting error on....
Wally Bird Ruled the Skys!

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