I have always believed that resort to Sect. 1113 of the Bankruptcy Code was the legal equivalent of a Debtor seeking the permission of the Court to engage in Legal Russian Roulette. Given the findings of the 7th Circuit Court of Federal Appeals, I feel that such a premonition was well founded.
The 7th Circuit Court has answered the question in vacating the TRO preventing the lessors’ of some 14 aircraft from physically repossessing their property:
" The competitive solution is for both sides to have access to markets—
and that outcome is achieved by allowing repossession. The
lessors will get the current market price for airframes of the type
and age involved. United, too, will enjoy a competitive price: it can
buy or rent equivalent planes on going terms. If, as United and the
Committee of Unsecured Creditors contend, the spot-market price
is below not only the original rental terms but also the modified
terms set when United filed for bankruptcy in 2002, then United
will be better off as a result. Its problem arises if, as the lessors are
betting, the price of used airplanes is higher than what United is
now paying for these 14 aircraft. But if, as United contends, the
highest and best use of these planes is with United, and the current
competitive price is less than what United is paying in bankruptcy,
then the threat to repossess is not credible, and United will keep the
planes without judicial intervention (though tough bargaining may
lie ahead to set the extent of the haircut from the old rental price)."
How can the protection of machinery be elevated above the protection of Human Labor?
If the highest best use of the labor previously supplied by a Union is to be recognized through their application elsewhere, then United would have been as wrong as the Lessors when their collateral was repossessed.
It is inconsistent that any Court would allow the repossession of the actual mechanism by which airlines perform the services they sell while enslaving the persons performing that labor. To do so would stand the Legislative intent of the RLA status quo provision on its' head while rendering the intent of the LMRDAs’ impotent.
IMHO, the closed shop provision of the RLA and the entire LMRDA would be sacrificed if a contract abrogation under 1113 consequently held that the status quo provision was only applicable to Union Labor and the limitation of the ability to avail themselves of “self-help†in the presence of a unilateral change in the wages, hours and working conditions covered by Union Contract by an Employer.
The 7th Circuit Court has answered the question in vacating the TRO preventing the lessors’ of some 14 aircraft from physically repossessing their property:
" The competitive solution is for both sides to have access to markets—
and that outcome is achieved by allowing repossession. The
lessors will get the current market price for airframes of the type
and age involved. United, too, will enjoy a competitive price: it can
buy or rent equivalent planes on going terms. If, as United and the
Committee of Unsecured Creditors contend, the spot-market price
is below not only the original rental terms but also the modified
terms set when United filed for bankruptcy in 2002, then United
will be better off as a result. Its problem arises if, as the lessors are
betting, the price of used airplanes is higher than what United is
now paying for these 14 aircraft. But if, as United contends, the
highest and best use of these planes is with United, and the current
competitive price is less than what United is paying in bankruptcy,
then the threat to repossess is not credible, and United will keep the
planes without judicial intervention (though tough bargaining may
lie ahead to set the extent of the haircut from the old rental price)."
How can the protection of machinery be elevated above the protection of Human Labor?
If the highest best use of the labor previously supplied by a Union is to be recognized through their application elsewhere, then United would have been as wrong as the Lessors when their collateral was repossessed.
It is inconsistent that any Court would allow the repossession of the actual mechanism by which airlines perform the services they sell while enslaving the persons performing that labor. To do so would stand the Legislative intent of the RLA status quo provision on its' head while rendering the intent of the LMRDAs’ impotent.
IMHO, the closed shop provision of the RLA and the entire LMRDA would be sacrificed if a contract abrogation under 1113 consequently held that the status quo provision was only applicable to Union Labor and the limitation of the ability to avail themselves of “self-help†in the presence of a unilateral change in the wages, hours and working conditions covered by Union Contract by an Employer.
