alpa objects to bk plan in court


Aug 20, 2002
UPDATE 1-US Airways pilot union objects to bankruptcy plan
Mon March 10, 2003 05:02 PM ET
(Adds U.S. Airways response, closing prices, paragraphs. 2, 4, 11)
NEW YORK, March 10 (Reuters) - U.S. Airways Group Inc.''s UAWGQ.OB pilots union on Monday objected to the No. 7 U.S. airline''s bankruptcy reorganization plan, court records show.
The Air Line Pilots Association''s objections, relating mainly to compensation and liability issues and affecting two former chief executives, were filed eight days before the U.S. Bankruptcy Court in Alexandria, Virginia, is slated to hear arguments on whether U.S. Airways is ready to exit Chapter 11.
U.S. Airways, based in Arlington, Virginia, has said it is on track to emerge by March 31 from bankruptcy protection. That would enable it to obtain a $900 million federal loan guarantee, which would back $1 billion of private financing. The airline sought protection from creditors in August 2002.
U.S. Airways spokesman David Castelveter said the airline is aware the objections have been filed and is confident they will be resolved. Pilots'' union spokesman Roy Freundlich and union lawyers did not immediately return calls for comment.
ALPA, which represents about 4,700 U.S. Airways pilots, said in its court filing there is no basis for U.S. Airways to make payments to certain executives and release those executives from some potential legal claims.
The pilots said the payments include about $15 million each to former chief executives Rakesh Gangwal and Steven Wolf and about $5 million to former general counsel Lawrence Nagin.
U.S. Airways, the union said, has not analyzed or considered possible actions to recover such sums.
The pilots also said the airline did not consult with the union, other labor unions and the creditors'' committee on a management compensation plan and certain employee-related retirement, incentive and other agreements.
U.S. Airways has said it can emerge from Chapter 11 if it wins court approval of its reorganization plan and resolves several matters, including its pilot pension obligations.
On March 1, Bankruptcy Judge Stephen Mitchell authorized the airline to terminate its $1.6 billion pilot pension plan. U.S. Airways wants to implement an $850 million plan but must resolve through mediation, scheduled to begin on Thursday, whether pension changes would violate the pilots'' contract.
U.S. Airways shares closed Monday in over-the-counter trading at 12.9 cents, down 2.7 cents.