Delta Raises Pilot Retirees Claims

[nycbusdriver]

The NY Times today reports that Delta management has agreed to add $719 million to pilot retirees unsecured claims. It brings the total of this claim to about $800 million, which means that until today Delta acknowledged only about $81 million of those claims.

How noble of Delta's management to find, over one year after entering bankruptcy, that the pilot retirees are entitled to 9x of what management originally were willing to give them! Those people running Delta really do have a heart of gold!

It couldn't possibly be the result of the USAirways offer of $8.8 billion to buy them out and their attempt to sour the offer, however slightly.

If the bankruptcy court approves the change, it will also give the pilots, who are adamantly opposed to the buyout, an added claim (and power) on the proceedings. Although the move does concern retired pilots as opposed to active pilots, I think Delta management feels they are tapping a group that is also opposed to the buyout.

I don't think it's legal to concoct "poison pills" while in Chapter 11, so I wonder how the court will view this ploy?

 

[ClueByFour]

I don't think it's legal to concoct "poison pills" while in Chapter 11, so I wonder how the court will view this ploy?

If the court does not take issue with the valuation of the claim, there is little it can (or will) do to stop it.

 

[LGA Fleet Service]

I don't think it's legal to concoct "poison pills" while in Chapter 11, so I wonder how the court will view this ploy?

Kind of like when a corporation sticks a government agency billions of dollars in pension obligations and then goes out and attracts billions of dollars in new capital investment?

 

[ringmaruf]

Of course, adding all these unsecured claims just reduces the size of what's left of the pie for all the other (existing) unsecured creditors, and that's the case whether the merger goes through or not. If I were an unsecured creditor, I'd be less than thrilled with DL for doing this and costing me money.

 

[deltawatch]

Looks like the retired Delta pilots just got a lot richer, and Delta got a lot poorer coming out of BK.

Seems Doug's offer is keeping Delta from screwing EVERYBODY.

Maybe it's making our biggest competitor (DL) exit BK with a cost structure we can compete with if nothing else.

 

[phasersonstun2]

The NY Times today reports that Delta management has agreed to add $719 million to pilot retirees unsecured claims. It brings the total of this claim to about $800 million, which means that until today Delta acknowledged only about $81 million of those claims.

How noble of Delta's management to find, over one year after entering bankruptcy, that the pilot retirees are entitled to 9x of what management originally were willing to give them! Those people running Delta really do have a heart of gold!

This is a PBGC thing, my friend. This settlement will actually make it easier for the acquisition to go through.