Pilots Union Says AMR Should Open Up Its Pension Records
4 hours 8 minutes ago - Dow Jones News
By Joseph Checkler
Of DOW JONES DAILY BANKRUPTCY REVIEW
The labor union representing AMR Corp.'s (AAMRQ) pilots is the latest party to rail against the American Airlines parent for not opening its books, saying the company has "taken a number of actions which indicate that they are operating under an undisclosed business plan."
In a Friday filing with the U.S. Bankruptcy Court in Manhattan, the Allied Pilots Association said it supports a request by the Pension Benefit Guaranty Corp. for AMR to disclose financial records regarding its pension and benefit plans.
Despite citing the pension liabilities as a chief reason it filed for bankruptcy last November, AMR has "not shared information necessary for the APA to calculate pension costs or to assess the debtor's long-term business plans and financial condition," the union's lawyers said in the court filing.
An AMR spokesman couldn't immediately comment.
The PBGC, which sits on AMR's unsecured creditors committee, could be asked to take on the company's pension obligations if it decides to terminate those plans. In a filing earlier this month, the PBGC cited concern over a December comment made by AMR bankruptcy attorney Harvey Miller, who said in court that "defined-benefit plans simply can't work." The PBGC said it has asked AMR for "extensive financial and actuarial information," and has yet to receive it. That's why it's asking the bankruptcy court to force AMR to supply detailed financial information about its four defined-benefit plans.
Also joining the fight is the Association of Professional Flight Attendants, which represents more than 18,000 AMR flight attendants. APFA lawyers in a Friday filing said "allowing APFA access to the information and discovery tools sought by the PBGC will not burden the Debtor in any way." AMR filed for Chapter 11 protection last November, blaming its financial woes on competitive disadvantages compared to its rivals and stifling labor costs.
Last week, the PBGC said AMR paid only $6.5 million of the $100 million it was set to contribute to the employee pension plans on Jan. 15.
AMR's partial payment raised further questions about what might happen if the company terminates its pensions. The PBGC would be able honor some, but not all, of the airline's pension obligations, which the agency said total $18.5 billion. Under that scenario, some benefits would shrink.
In 2007, AMR was one of a handful of airlines Congress allowed to reduce the amount of cash set aside for pensions.
"It would be a tragedy if American repaid Congress's generosity by turning around and killing the plans anyway," PBGC Director Josh Gotbaum said earlier this month.
(Dow Jones Daily Bankruptcy Review covers news about distressed companies and those under bankruptcy protection.)
-By Joseph Checkler, Dow Jones Newswires; 212-416-2152; [email protected]
(Michael Corkery contributed to this article.)
(END) Dow Jones Newswires
01-23-12 1407ET
Copyright (c) 2012 Dow Jones & Company, Inc.
4 hours 8 minutes ago - Dow Jones News
By Joseph Checkler
Of DOW JONES DAILY BANKRUPTCY REVIEW
The labor union representing AMR Corp.'s (AAMRQ) pilots is the latest party to rail against the American Airlines parent for not opening its books, saying the company has "taken a number of actions which indicate that they are operating under an undisclosed business plan."
In a Friday filing with the U.S. Bankruptcy Court in Manhattan, the Allied Pilots Association said it supports a request by the Pension Benefit Guaranty Corp. for AMR to disclose financial records regarding its pension and benefit plans.
Despite citing the pension liabilities as a chief reason it filed for bankruptcy last November, AMR has "not shared information necessary for the APA to calculate pension costs or to assess the debtor's long-term business plans and financial condition," the union's lawyers said in the court filing.
An AMR spokesman couldn't immediately comment.
The PBGC, which sits on AMR's unsecured creditors committee, could be asked to take on the company's pension obligations if it decides to terminate those plans. In a filing earlier this month, the PBGC cited concern over a December comment made by AMR bankruptcy attorney Harvey Miller, who said in court that "defined-benefit plans simply can't work." The PBGC said it has asked AMR for "extensive financial and actuarial information," and has yet to receive it. That's why it's asking the bankruptcy court to force AMR to supply detailed financial information about its four defined-benefit plans.
Also joining the fight is the Association of Professional Flight Attendants, which represents more than 18,000 AMR flight attendants. APFA lawyers in a Friday filing said "allowing APFA access to the information and discovery tools sought by the PBGC will not burden the Debtor in any way." AMR filed for Chapter 11 protection last November, blaming its financial woes on competitive disadvantages compared to its rivals and stifling labor costs.
Last week, the PBGC said AMR paid only $6.5 million of the $100 million it was set to contribute to the employee pension plans on Jan. 15.
AMR's partial payment raised further questions about what might happen if the company terminates its pensions. The PBGC would be able honor some, but not all, of the airline's pension obligations, which the agency said total $18.5 billion. Under that scenario, some benefits would shrink.
In 2007, AMR was one of a handful of airlines Congress allowed to reduce the amount of cash set aside for pensions.
"It would be a tragedy if American repaid Congress's generosity by turning around and killing the plans anyway," PBGC Director Josh Gotbaum said earlier this month.
(Dow Jones Daily Bankruptcy Review covers news about distressed companies and those under bankruptcy protection.)
-By Joseph Checkler, Dow Jones Newswires; 212-416-2152; [email protected]
(Michael Corkery contributed to this article.)
(END) Dow Jones Newswires
01-23-12 1407ET
Copyright (c) 2012 Dow Jones & Company, Inc.
