A Win for the Employees? http://finance.yahoo.com/news/amr-loses-bid-terminate-retiree-benefits-001416404--sector.html
AMR Loses in BK court
- Thread starter Hope777
- Start date
Yes, but the article says AA's next step will be to go to trial.Hope777 said:
I can't help but think about those who could've taken the early out but did not because of the retiree medical issue.
Yes, AA "lost" in that the court did not grant summary judgment, but AA hasn't yet "lost" the ability to terminate the retiree medical. AA lost a preliminary skirmish but hasn't lost the war.
In asking for summary judgment, AA alleged that there was no genuine dispute about any material facts and that AA was entitled to judgment as a matter of law. The court disagreed as to most of the retirees. As pointed out above, the next step is a trial unless AA waves a white flag. Given the amount of money at issue, I doubt AA will quickly surrender.
In asking for summary judgment, AA alleged that there was no genuine dispute about any material facts and that AA was entitled to judgment as a matter of law. The court disagreed as to most of the retirees. As pointed out above, the next step is a trial unless AA waves a white flag. Given the amount of money at issue, I doubt AA will quickly surrender.
WorldTraveler
Corn Field
- Dec 5, 2003
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fwaaa,
if AA wins in court and now that AA is out of BK, do the retirees have any chance of a BK claim as they would have if this had happened in BK?
if AA wins in court and now that AA is out of BK, do the retirees have any chance of a BK claim as they would have if this had happened in BK?
AA didn't lose. We lost, because now we probably will never see the matching funds because there was no successful resolution of the 1114 process.
In the end the zero out of pocket plan will be terminated (or as NYER and Overspin say, "they arent losing their benefits, they are just changing the way they pay for it") but the Judge screwed them as well because instead of getting equity they will likely just get coverage for whatever time elapses till it is terminated. Its a joke how AA is complaining how much its costing them, $10 million a month to meet its obligations to people they underpaid over a lifetime of work while they are bringing in around $2.5 billion a month. So its costing them less than one half of one percent of their income to pay for retiree medical.
In the end the zero out of pocket plan will be terminated (or as NYER and Overspin say, "they arent losing their benefits, they are just changing the way they pay for it") but the Judge screwed them as well because instead of getting equity they will likely just get coverage for whatever time elapses till it is terminated. Its a joke how AA is complaining how much its costing them, $10 million a month to meet its obligations to people they underpaid over a lifetime of work while they are bringing in around $2.5 billion a month. So its costing them less than one half of one percent of their income to pay for retiree medical.
MCI transplant
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- Jun 4, 2003
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Bob, as a retiree,over 65, AA hasn't paid a penny on my family, or myself last year anyway. But it's nice to know it's there, if needed. And that is worth more to me than any one time equity payment which I may, or may not, qualify for anyway. But this is more a fight for what is right. it is tell AA to live up to promises made while we were still working. Keep in mind! We are what you will be in a few years!!!!Bob Owens said:
WeAAsles
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- Oct 20, 2007
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The official committee representing AMR's retirees is "very pleased" with the judge's ruling and "hopes that AMR will reconsider" its efforts to terminate the benefits, committee attorney Catherine Steege, of Jenner & Block LLP, said Friday in an email.
Charles B. Sklarsky, another Jenner & Block attorney who represented the retiree committee, said the judge's ruling doesn't resolve AMR's claim that retiree benefits aren't vested. If the benefits were vested, then AMR wouldn't be able to alter them without retirees' consent.
As a result, the ruling "leaves open several paths, which of course could include negotiating a settlement," Mr. Sklarsky said Friday in an email.
Charles B. Sklarsky, another Jenner & Block attorney who represented the retiree committee, said the judge's ruling doesn't resolve AMR's claim that retiree benefits aren't vested. If the benefits were vested, then AMR wouldn't be able to alter them without retirees' consent.
As a result, the ruling "leaves open several paths, which of course could include negotiating a settlement," Mr. Sklarsky said Friday in an email.
Glad to hear you are in good health, and yes its good that its there,. It wont be there for us. Thanks to some of the guys who when they left voted YES.MCI transplant said:
If you are retired, over 65 and haven't used AA to pay anything you could have argued in BK that you had $50,000 vested and sitting there to pay for Medical that you would otherwise have to lay out of pocket for and could have argued for equity based on that $50,000. If you were made 100% whole as AA claimed everyone was you could have recieved $50k in stock. That would pay for a lot of supplemental insurance. It probably would have been a nightmare figuring out who got what though as each person would be different.
Now the equity has been distributed, IIRC the Judge made a comment early on that the retiree medical did not have to be ruled on in BK. I guess when the retirees argued that it was a vested benefit because they actually paid into it he reconsidered.
The plan allows for the company to get out of it without going BK. Again, read the plan. If you retire at 55, day one, 100% of the company match reverts to the company, then from 55 to 65 your contribution is drawn down in 10% increments until there is nothing left, then your coverage is $50k max lifetime payout, which is Ok because medicare pays 80%.
I believe that AA will claim that they have the right to dissolve the plan, return whatever is left to those that have balances, for those under 65 it will only be what they have left of their contributions, the match having reverted to the company once they retired and started receiving benefits. Those are the people who are driving the $10 million a month that AA is complaining about, they will get screwed.
We will also likely get screwed as the company will say that there was no successful resolution of the 1114 process and we agreed to leave the plan and have the match contingent upon the 1114 process being "successful" which they will claim was not because they were still paying when the company left BK, that the 1114 process concluded without resolution and went to regular court. Hopefully I'm wrong, but that was my concern from day one with the language, we should have rejected it.
There is an argument that your coverage is a vested benefit, and I don't recall if the plan spells out what happens to those who are over 65 and on medicare. Because 80% is picked up by Medicare, and the pool of people covered would be shrinking at a pretty fast rate you may slide by and keep it. That would be the company's excuse for where our matched funds went.
I have no objections to the retirees getting what AA promised them, I only object to AA using my funds to do it.
Of course the lawyers want a settlement, so they can get their cut. If the retirees win their right to keep the benefit then how do the Lawyers get rich?WeAAsles said:
There is a fund with around $120 million sitting there, and the only ones that have no say in what happens to the money are the ones who that money rightly belongs to-us.
Bob,Bob Owens said:
I do not understand why we keep link together the retirees benefits with our prefunding match, which I understand are funds set aside on accounts under each employee name, if the judge rule that the company have to pay retiree medical what I have to do with that? That is their responsability not mine. Why TWU do not fight for this money that we should have received long time ago. Or is that the company expects that the active employees pay for the retirees medical? NOT FAIR. That is a company expense, not ours. After all the company can afford that and more after all our unneeded concesions. AA PLEASE FREE OUR FUNDS!!! We need a real union. GO AMFA
MCI transplant
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- Jun 4, 2003
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Hey, I'm no Lawyer, but my question to the company would be, how can they justify using your money to pay for our plan? Whatever shortcomes should come from the company, and not from a source deadicated for another group! And why wouldn't your Union take such a position?Bob Owens said:
Read the plan, Sure we can fight for it and take a position on it but in the end the decision is put before a judge or arbitrator and he is going to make his determination based on what was written into the plan and the contract we agreed to. The Judge will likely say we defined our position in the contract-"upon successful resolution of the 1114 process". As I've said before, I hope I'm wrong.MCI transplant said:
Look at what happened with the supplemental Medical the company was selling.Nobody bought the plan for the regular medical, they bought it for the retiree part, and the company said that in order to be eligible for the retiree part you had to pay into it from when it was offered. So for 15 years or so people paid into the plan saying that when they retire at 55 they get an extra $250 k of coverage. The plan did very well, accumulating around $80 million. Then the company decided to terminate the plan and keep the money, and they did. The chances of winning a lawsuit on that were probably better but Little and company decided not to pursue it. The company tried to spin it by saying they were only going to use those funds for employee benefits, it wasn't going into the General fund, well no kidding, that's all they could use them for but its still found money because that $80 million satisfied obligations that would have had to come out of the General fund. So the net result is the same.
Once again, in negotiations I objected to that language, so if this does go south and we lose the other half confront those who voted YES, especially those who voted yes to bring it back because they knew what it said and they knew why we were against it.
AANOTOK
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- Oct 10, 2009
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Blame the members, not the TWU for allowing the language. Bob, so a section 1114 wasn't even filed, why didn't the TWU and their high powered lawyers know or say anything about that?
As far as lawsuits, hell the members can't afford that. We know were lawsuit money comes from now and it ain't the international or locals...
As far as lawsuits, hell the members can't afford that. We know were lawsuit money comes from now and it ain't the international or locals...
The US Airways side of the new company has no retirement healthcare benefits. Hope we don't have to pay for someone elses and get nothing in return? That's exactly how Social Security / Medicare will work for those under 50.
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