AMR files to end Adverserial Proceeding against the Retiree Committee.

WeAAsles

Veteran
Oct 20, 2007
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Looks like the Retirees who jumped ship prior to the cutoff date can breath a final sigh of relief.

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Someone tell Ed. Koziatek that the prefund match is about to be sealed shut.

It's been sealed shut for a long time, decades. That's why it was so hard to get into and needed the BK court to dissolve the Trust.

The money in the Trust can only be used for the stated purpose of the Trust which is to pay for the retiree medical for early retiree's which left before the changes in the coverage.

If there is any money left after all the recipients have gone through their eligibility the TWU and Company would need to get together to figure out what to do.
 
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Someone tell Ed. Koziatek that the prefund match is about to be sealed shut.

Can’t tell Ed something that I don’t believe just yet. Still think I might see some of my 6G’s in value someday?
 
Is been sealed shut for a long time, decades. That's why it was so hard to get into and needed the BK court to dissolve the Trust.

The trust won’t be dissolved with this decision and there is still an amount on record for many thousands of Members not currently receiving a benefit.
 
So how long, do you think it will take to settle this lawsuit, and do they have survival benefits for their spouses?

Not a lawsuit. The Company is actually surrendering any claim at trying to take Retiree Medical from those who left prior to the Bankruptcy cuts taking effect.

It’s a big win for the Blue Collar worker in this case.
 
Not a lawsuit. The Company is actually surrendering any claim at trying to take Retiree Medical from those who left prior to the Bankruptcy cuts taking effect.

It’s a big win for the Blue Collar worker in this case.
Dang Weazzz you mean the TWU lawyers spent some money to help their retired members. Man you better not tell Swampy or Hacky! :)
 
The money in the Trust can only be used for the stated purpose of the Trust which is to pay for the retiree medical for early retiree's which left before the changes in the coverage.

If there is any money left after all the recipients have gone through their eligibility the TWU and Company would need to get together to figure out what to do.

The mistake in the language accepted was stipulating that the Company needed to complete a particular process (BK 1114) rather than stipulating any changes at all or if they were unsuccessful in their challenge to drop the benefit would mean former active members would be reinserted and retain their original value to be utilized for Retiree Medical purposes until those amounts were exhausted.

The Company petitioned to the Court to end the program due to the cost of managing the Benefit. Basically the cost of administering Medical care which is not paid through the trust but a separate cost to the Airline. The Company is self funded for Medical claims but in regards to Retiree Medical the claims would be paid out through the Prefunding Trust.

Otherwise I do believe the Arbitrator ruled that the door was still open that AA could have a responsibility once they decided what would be their next move.

The TWU needing to continue forward.
 
Dang Weazzz you mean the TWU lawyers spent some money to help their retired members. Man you better not tell Swampy or Hacky! :)


Published 06 Nov, 2013

“This report was prepared by 1114 Committee Counsel to answer questions regarding the 1114 procedure and retiree benefits, and we believe that it should be made available directly to those who have questions or concerns regarding those matters.”

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.
 

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