So just to keep momentum of employee angst, I believe the Judge rules either today or in the near future as to the discission to payout on the promise AA made to us on company dollars that were provided toward our cancelled retiree health care. I'm confused as to why some form of information wouldn't have been provided our way prior to the equity release. Knowing we had some indication of money coming our way from the Prefunding trust would minimize hasty decissions to cash in our equity, no?...or did I just answer my own question? :blush:
Company Match of Prefunding Refund
- Thread starter JABORD
- Start date
- Thread Starter
- #4
So should I interpret the minimal responses as an indication that many have chosen to grab their ankles on this hot button issue? I will not be too thrilled to hear that this becomes another promise stolen from us during the pilaging of employees. So let me ask, has anyone heard as to wether the Judge addressed the refunding of the Company Prefund match prior to the bankruptcy exit? Any wisdom out there as to what our options are if the ruling is post bankruptcy?
I have not heard for sure. What my local union chair is saying, is that current AA said no. However the incoming group told them yes. So, they told us we would get it back. No timeframe for the money was given. So, I assume we will get it back. However nothing written in stone to show or send you to. APFA has always told us if they came out of bankruptcy with the retiree medical still in the air, then our agreements were satisfied and that we should get our prefunding back ASAP.
As long as the issue has not been resolved or terminated by the company, the refund also remains unresolved.
Things may very well change now that the company has exited bankruptcy and a new management team is in place.
Things may very well change now that the company has exited bankruptcy and a new management team is in place.
TWU informer
Veteran
- Nov 4, 2003
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I thought ObamaCare meant nobody would be without insurance? So why not supplement them to the cost of the Insurance Exchange price? There is no need for taking from one to give to another when the Government has already made that LAW!OldGuy@AA said:
APFA has taken the line that if they emerged from BK then the issue was resolved. Thus their opinion has been that we should get back the company's portion of the prefunding. Like I said before AA said no, US supposedly said yes. We shall see. That is just what APFA is telling people at my base.
- Thread Starter
- #9
Hey D, you've never struck me as one to fan the flames of BS. Even OldGuy seems to usually have his facts straight, but "no need for taking from one to give to another" ?? I understand when Kosiatek's name came up regarding the 1114 process, many who know of his legacy to screw the M&E group began to spread crap that he was trying to get our Prefund $$ to benefit the retirees. I have yet to see any proof of that. Now don't misunderstand me, I would love to meet the guy, and his brother for that matter, in a dark alley here in Chi-Town and express my appreciation for the crap my family experienced with the layoffs in '94, but I believe the Retire efforts to fight for promises made are not related to our Company match payout owed to us.TWU informer said:
On your political note I would suggest, be careful what you ask for. We were given notice that the "supplement toward Exchange pricing" was one reason the recent TA at UAL was DOA.
- Thread Starter
- #10
I believe the following will provide some ability for the smart crowd to interpret the Employer Match obligation. Eventually I believe the Judge has authority to rule and then we must determine our satisfaction or course of action.(the attachment was a legal review of the wording)
"With regard to the pre-funding of American Airlines retiree medical benefits, you have
requested that I review the terms of applicable collective bargaining agreements and
Trust language in order to comment to the AA Presidents Council on the legal status of
the employer match to employee prefunding contributions."
Taken from the current Agreement,
ATTACHMENT 41.1 PREFUNDING
September 12, 2012
Mr. Robert F. Gless
Deputy Director - ATD
AA System Coordinator
Transport Workers Union of America, AFL-CIO
1791 Hurstview Drive
Hurst, TX 76054
Employee and Company Prefunding Contributions
Dear Robert,
During the restructuring agreement negotiations, the parties agreed that upon implementation of the changes to the Retiree medical plan program an active employee who currently prefunds for retiree medical will be refunded the employees prefunding account (which reflects investment experience), excluding employees who have already received employee prefunding refunds.
In addition, the parties agreed that contingent on the successful resolution of the Section 1114 process, as soon as practicable after termination of the Trust Agreement for the Group Life and Health Benefits Plan for Employees of Participating AMR Corporation Subsidiaries (Union Employees), the Company prefunding contributions for each participating active employee, and investment earnings attributable thereto, will be distributed to the employee (subject to applicable tax withholdings and/or excise tax), excluding employees who have already received refunds of their employee prefunding accounts. The refund will be made to the employee no later than 120 days following September 12, 2012.
"With regard to the pre-funding of American Airlines retiree medical benefits, you have
requested that I review the terms of applicable collective bargaining agreements and
Trust language in order to comment to the AA Presidents Council on the legal status of
the employer match to employee prefunding contributions."
Taken from the current Agreement,
ATTACHMENT 41.1 PREFUNDING
September 12, 2012
Mr. Robert F. Gless
Deputy Director - ATD
AA System Coordinator
Transport Workers Union of America, AFL-CIO
1791 Hurstview Drive
Hurst, TX 76054
Employee and Company Prefunding Contributions
Dear Robert,
During the restructuring agreement negotiations, the parties agreed that upon implementation of the changes to the Retiree medical plan program an active employee who currently prefunds for retiree medical will be refunded the employees prefunding account (which reflects investment experience), excluding employees who have already received employee prefunding refunds.
In addition, the parties agreed that contingent on the successful resolution of the Section 1114 process, as soon as practicable after termination of the Trust Agreement for the Group Life and Health Benefits Plan for Employees of Participating AMR Corporation Subsidiaries (Union Employees), the Company prefunding contributions for each participating active employee, and investment earnings attributable thereto, will be distributed to the employee (subject to applicable tax withholdings and/or excise tax), excluding employees who have already received refunds of their employee prefunding accounts. The refund will be made to the employee no later than 120 days following September 12, 2012.
IMPORTANT UPDATE REGARDING THE 1114 AND RETIREES
November 5, 2013
On October 21, 2013, the United States Bankruptcy Court overseeing American Airlines chapter 11 bankruptcy case entered an order confirming American Airlines chapter 11 plan. There has been some confusion about what the confirmation order means for American’s 40,000 plus retirees and their benefits. The fact is that the entry of the confirmation order will not change all that much for retirees.
First, American is not out of bankruptcy yet and will not be able to emerge from bankruptcy unless and until its merger with US Airways is approved and the merger closes. If the merger is not approved, American’s confirmation order will be vacated and American will have to propose a different plan. Absent a settlement, the District Court handling the Government’s anti-trust suit is expected to start the trial over the merger on November 25, 2013 and the trial is expected to last through mid-December, 2013. Under the current schedule, the District Court will hear closing arguments on January 6, 2014 and rule thereafter. In the meantime, American must continue to comply 11 U.S.C. § 1114. Section 1114 prohibits American from making any changes to retiree benefits without the approval of the Bankruptcy Court. It also establishes certain procedures that a debtor in bankruptcy, like American, must follow before it changes or eliminates the medical and life benefits it provides to its retirees and the standards it must meet to do so. American cannot currently satisfy those standards, because they require, among other things, that American prove that it cannot confirm a plan without modifying retiree benefits. Because the Bankruptcy Court has already confirmed a plan for American, American cannot prove it cannot confirm a plan. Thus, the status quo will remain in place for the time being.
Second, the lawsuit that is pending against the Retiree Committee will continue. On July 6, 2012, American Airlines filed suit against its retirees, asking the Court to declare that it has the right to unilaterally take away the medical and life insurance benefits that retirees earned when they worked for American Airlines. On August 15, 2012, American Airlines filed a motion for partial summary judgment in that case, asking the Bankruptcy Court to rule that none of the American Airlines retirees has a “vested right” to the medical and life insurance benefits currently provided by American Airlines. American has argued that if the Court finds that retirees do not have a vested right to benefits then Section 1114 allegedly does not apply and American can supposedly terminate or modify the benefits without Court approval and without paying any damages to the retirees for the benefits they have lost. The Retiree Committee has opposed this motion. The Retiree Committee’s position is that the benefits are vested, that Section 1114 applies whether the benefits are vested or not, and that retirees will receive a claim whether the benefits are vested or not. If the Bankruptcy Court denied American’s motion, the case will be set for trial. If the motion is granted, in whole or in part, the Court will have to address the balance of the relief American requests, including whether and what to extent Section 1114 applies and whether retirees have a claim against the estate, still must be decided. American has, however, agreed in its Plan of Reorganization that if the final outcome of this lawsuit is that retirees are entitled to a claim against American for the value of any benefits that American eliminates, American will not eliminate the benefits and instead will continue to honor its contractual commitments to retirees to provide retiree benefits, meaning that retirees will continue to receive the benefits they were receiving when American filed for bankruptcy in November, 2011 and continue to receive today. The Bankruptcy Court has not stated when it will rule on the pending motion.
Third, under American’s confirmed plan, the Retiree Committee appointed by the United States Trustee to represent your interests remains in place. In April 2012, the United States Trustee appointed a five member committee representing each of American’s work groups to represent your interests and to work to keep your retiree medical and life insurance benefits in place. The Retiree Committee remains in place and to ensure it can do its job, American is required to continue to pay the Retiree Committee’s legal and other professional bills. Thus, the Retiree Committee will continue to defend the lawsuit and it will oppose any efforts by American to take away your medical and life benefits.
In the meantime, American Airlines is still providing medical and life insurance benefits to its retirees and has told the Committee through counsel that it will continue to do so until this litigation is resolved.
Captain James G. Sovich,
Chairman of the Section 1114 Committee
November 5, 2013
On October 21, 2013, the United States Bankruptcy Court overseeing American Airlines chapter 11 bankruptcy case entered an order confirming American Airlines chapter 11 plan. There has been some confusion about what the confirmation order means for American’s 40,000 plus retirees and their benefits. The fact is that the entry of the confirmation order will not change all that much for retirees.
First, American is not out of bankruptcy yet and will not be able to emerge from bankruptcy unless and until its merger with US Airways is approved and the merger closes. If the merger is not approved, American’s confirmation order will be vacated and American will have to propose a different plan. Absent a settlement, the District Court handling the Government’s anti-trust suit is expected to start the trial over the merger on November 25, 2013 and the trial is expected to last through mid-December, 2013. Under the current schedule, the District Court will hear closing arguments on January 6, 2014 and rule thereafter. In the meantime, American must continue to comply 11 U.S.C. § 1114. Section 1114 prohibits American from making any changes to retiree benefits without the approval of the Bankruptcy Court. It also establishes certain procedures that a debtor in bankruptcy, like American, must follow before it changes or eliminates the medical and life benefits it provides to its retirees and the standards it must meet to do so. American cannot currently satisfy those standards, because they require, among other things, that American prove that it cannot confirm a plan without modifying retiree benefits. Because the Bankruptcy Court has already confirmed a plan for American, American cannot prove it cannot confirm a plan. Thus, the status quo will remain in place for the time being.
Second, the lawsuit that is pending against the Retiree Committee will continue. On July 6, 2012, American Airlines filed suit against its retirees, asking the Court to declare that it has the right to unilaterally take away the medical and life insurance benefits that retirees earned when they worked for American Airlines. On August 15, 2012, American Airlines filed a motion for partial summary judgment in that case, asking the Bankruptcy Court to rule that none of the American Airlines retirees has a “vested right” to the medical and life insurance benefits currently provided by American Airlines. American has argued that if the Court finds that retirees do not have a vested right to benefits then Section 1114 allegedly does not apply and American can supposedly terminate or modify the benefits without Court approval and without paying any damages to the retirees for the benefits they have lost. The Retiree Committee has opposed this motion. The Retiree Committee’s position is that the benefits are vested, that Section 1114 applies whether the benefits are vested or not, and that retirees will receive a claim whether the benefits are vested or not. If the Bankruptcy Court denied American’s motion, the case will be set for trial. If the motion is granted, in whole or in part, the Court will have to address the balance of the relief American requests, including whether and what to extent Section 1114 applies and whether retirees have a claim against the estate, still must be decided. American has, however, agreed in its Plan of Reorganization that if the final outcome of this lawsuit is that retirees are entitled to a claim against American for the value of any benefits that American eliminates, American will not eliminate the benefits and instead will continue to honor its contractual commitments to retirees to provide retiree benefits, meaning that retirees will continue to receive the benefits they were receiving when American filed for bankruptcy in November, 2011 and continue to receive today. The Bankruptcy Court has not stated when it will rule on the pending motion.
Third, under American’s confirmed plan, the Retiree Committee appointed by the United States Trustee to represent your interests remains in place. In April 2012, the United States Trustee appointed a five member committee representing each of American’s work groups to represent your interests and to work to keep your retiree medical and life insurance benefits in place. The Retiree Committee remains in place and to ensure it can do its job, American is required to continue to pay the Retiree Committee’s legal and other professional bills. Thus, the Retiree Committee will continue to defend the lawsuit and it will oppose any efforts by American to take away your medical and life benefits.
In the meantime, American Airlines is still providing medical and life insurance benefits to its retirees and has told the Committee through counsel that it will continue to do so until this litigation is resolved.
Captain James G. Sovich,
Chairman of the Section 1114 Committee
My bet is that the 1114 takes a couple of years in litigation until just about every retiree has hit age 65.....
At that point a ruling might be made that since it has essentially run out of funds......namely the amount that is the pre funding due the members, it will be a wash.
I hope not,,,, but who knows.....Maybe it will be resolved faster now that the company is out of bankruptcy.
At that point a ruling might be made that since it has essentially run out of funds......namely the amount that is the pre funding due the members, it will be a wash.
I hope not,,,, but who knows.....Maybe it will be resolved faster now that the company is out of bankruptcy.
- Thread Starter
- #15
Good find MM.MetalMover said:
"Judge nonetheless, said the language of the contract made clear that GM did not owe the payment."
Not sure if the TWU neglected to protect the retirees with language like the UAW did. I'm sure AA will apply this example to the court if they believe it will support their efforts.
"Whether New GM has a moral obligation regarding the payment is another matter and not relevant,"
I believe there was a time when 'moral' was a common thread in the fabric of society. Mostly in my fathers time, you know, the era of "Ozzie and Harriet". Now as Wall Street barrels through society and delegates Main Street to just a frontage road, it wouldn't surprise me if this word 'moral' disappears from Webster's Dictionary.
On another note,
"Up in the Air is a very useful compendium of data about and experience in the airline industry. Every political, union and industry executive concerned about the industry's fate will learn something from its pages, which include suggestions for bringing better labor-management relations into being."—Robert L. Crandall, Retired Chairman and CEO, American Airlines
http://www.cornellpress.cornell.edu/book/?GCOI=80140100965480
On another another note,
Does anyone know where to find scheduled dates for AA to appear to the Judge and topics on the docket?
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