"fair And Equitably" For All Affected Creditors

[usairways_vote_NO]

So do not listen to that one certain party that says the compnay will have their way with you.

LINK


‘Fairly and Equitably’ Requirement Section 1113 also mandates that a debtor’s proposal to modify a CBA treat all creditors, the debtor and all affected parties “fairly and equitably.â€A debtor may not seek to place a disproportionate share of the financial burden of avoiding liquidation upon labor unions. See In Re National Forge Co.,279 B.R. 493 (Bankr. W.D.Pa. 2002). Rather, the burden must be spread fairy and equitably among all affected parties.

As the Wheeling-Pittsburgh Steel court noted, the focus of the inquiry is upon whether the proposed sacrifices will be borne exclusively and disproportionately by members of the bargaining unit or will be spread among all affected parties. Moreover, the concessions sought from various parties “must be examined from a realistic standpoint. â€

In the US Airways case, 80 percent of the company’s total proposed cost reductions came from union concessions. Whether this was fair and equitable was never decided since the unions ultimately agreed to the concessions rather than litigating the issue before the Bankruptcy Court.

Nevertheless, it may be assumed that, if tested, the fairness and equity of these concessions would have had to have been compared to other potential cost savings (for example, greater savings available from equipment lessors).When viewed from this perspective, it may be argued that such concessions were not fair and equitable.

While there are many features that may be included in a modification proposal to satisfy the “fairly and equitably†requirement, one that deserves mentioning here is the so-called “snapback†provision. Snap back provisions provide for the restoration of wages and benefits in the event the debtor out-performs its projections over a given time period.

Most courts favor snap back provisions “because they ensure that once a company is profitable enough for suc-cessful reorganization, further profits not ‘necessary’ for reorganization are returned to the employees who made the concessions.†In re IndianaGrocery Co., Inc., 136 B.R. 182(Bankr. S.D.Ind. 1990). The court in Inre Express Freight Lines, Inc., 119 B.R.1006 (Bankr. E.D. Wisc. 1990), however, held that a snap back provision was not necessary but was an element of unfairness in the modification proposal in issue.

 

[GadgetFreak]

So do not listen to that one certain party that says the compnay will have their way with you.

LINK

‘Fairly and Equitably’ RequirementSection 1113 also mandates that a debtor’s proposal to modify a CBA treat all creditors, the debtor and allaffected parties “fairly and equitably.â€A debtor may not seek to place a disproportionate share of the financial burden of avoiding liquidation upon labor unions. See In Re National Forge Co.,279 B.R. 493 (Bankr. W.D.Pa. 2002). Rather, the burden must be spread fairy and equitably among all affected parties. As the Wheeling-Pittsburgh Steelcourt noted, the focus of the inquiry isupon whether the proposed sacrifices will be borne exclusively and disproportionately by members of the bargaining unit or will be spread among all affected parties. Moreover, the concessions sought from various parties “must be examined from a realistic standpoint. †In the US Airways case, 80 percentof the company’s total proposed cost reductions came from union concessions. Whether this was fair and equitable was never decided since the unions ultimately agreed to the concessions rather than litigating the issue before the Bankruptcy Court. Nevertheless, it may be assumed that, if tested, the fairness and equity of these concessions would have had to have been compared to other potential cost savings (for example, greater savings available from equipment lessors).When viewed from this perspective, it may be argued that such concessions were not fair and equitable.While there are many features that may be included in a modification proposal to satisfy the “fairly and equitably†requirement, one that deserves mentioning here is the so-called “snapback†provision. Snap back provisions provide for the restoration of wages and benefits in the event the debtor out-performs its projections over a given time period. Most courts favor snap back provisions “because they ensure that once a company is profitable enough for suc-cessful reorganization, further profits not ‘necessary’ for reorganization are returned to the employees who made the concessions.†In re IndianaGrocery Co., Inc., 136 B.R. 182(Bankr. S.D.Ind. 1990). The court in Inre Express Freight Lines, Inc., 119 B.R.1006 (Bankr. E.D. Wisc. 1990), however, held that a snap back provision was not necessary but was an element of unfairness in the modification proposal in issue.

[post="179352"][/post]​

Personally, I dont think it will get that far. But if it does they are not going to have a hard time proving they are fare and equitable if their labor costs are higher than their competitors. And I have very little doubt that they are in fact higher.

 

[usairways_vote_NO]

Personally, I dont think it will get that far. But if it does they are not going to have a hard time proving they are fare and equitable if their labor costs are higher than their competitors. And I have very little doubt that they are in fact higher.

One, labor costs are not that much higher then their competitors, do you know who their real competitors are? Not who you are led to believe.

Two, the labor costs compared to competitors have nothing at all to do with the " "fair And Equitably" to all affected parties provision of section 1113.

Do you mind explaining what you meant now?

 

[cavalier]

I know a lot about the Wheeling-Pittsburgh Steel situation from family sources who deal with them. The unions didn't fair well in the least and the ones left standing are old men, honestly. The companies that stood the most to lose when WP went BK ended up with most of their business. The best case was twenty cents on the dollar for the businesses affected that dealt with WP, the union ranks were low on the totem pole unfortunately and fared a hell of a lot worse. I know a few of them personally.

I personally think if a young persons wants a future with good earning potential they should pursue the medical field as it has yet to be as affected as a lot of other industries have been where price is king and the workers are paying the price in low wages. The railroads are also a good place if you don’t mind travel or strict work rules that are enforced. Then there is always the buddy system where people with no skills and know someone are the ones getting the good paying jobs, welcome to life.

Seems all the talking heads are predicting U will never emerge. I also heard a FF pax saying the unions need to get real, what a slap, I love it! But that’s what the perception is out there, greedy mean and overpaid union members. It’s insanity the world we live in.

 

[PITbull]

Personally, I dont think it will get that far. But if it does they are not going to have a hard time proving they are fare and equitable if their labor costs are higher than their competitors. And I have very little doubt that they are in fact higher.

[post="179357"][/post]​

You could not be more incorrect. And that will be labor's proof. We are in fact lower, than ALL of the lagacy carriers and many of the LCC carriers including America West.

AFA is preparing for this argument with our financial specialist who has been working on this for the past 4 months.

Sorry Charlie, co. will have to use another argument, and I am sure they know this.

 

[USA320Pilot]

According to ALPA's attorney's who spoke to the MEC in "open session" last week, ALPA had strong arguments in the TWA case and still lost. The court's primary interest is preserving the state for the creditors and ALPA's attorney's have repeatedly said every day the union waits to cut a deal the worse it will get.

Guess what? They were right.

Furthermore, the attorney's have said the contracts could be "shredded". It no longer matters what we think we are worth or a comparison to other companies, it's what the court thinks we are worth and Judge Mitchell is clearly on the company's side.

Respectfully,

USA320Pilot

 

[GadgetFreak]

One, labor costs are not that much higher then their competitors, do you know who their real competitors are? Not who you are led to believe.

Two, the labor costs compared to competitors have nothing at all to do with the " "fair And Equitably" to all affected parties provision of section 1113.

Do you mind explaining what you meant now?

[post="179368"][/post]​

What I said is quite clear. You can believe it or not. But I dont think clarity is at issue here.

 

[GadgetFreak]

You could not be more incorrect. And that will be labor's proof. We are in fact lower, than ALL of the lagacy carriers and many of the LCC carriers including America West.

AFA is preparing for this argument with our financial specialist who has been working on this for the past 4 months.

Sorry Charlie, co. will have to use another argument, and I am sure they know this.

[post="179407"][/post]​

Again, I dont see this likely to last through a protracted series of court proceedings. But if it does I dont think the company will have a hard time showing labor costs (not salaries alone) are higher than key competitors in key markets. You obviously believe differently but I doubt anyone would be able to convince the court of this. The court will be looking to protect the creditors, not the employees, and will view any numbers from that perspective.

 

[usairways_vote_NO]

What I said is quite clear. You can believe it or not. But I dont think clarity is at issue here.

[post="179416"][/post]​

You are quite right clarity is not the issue at all, nevermind that your statement "And I have very little doubt that they are in fact higher" was false, what is at at issue is your statement "But if it does they are not going to have a hard time proving they are fare and equitable if their labor costs are higher than their competitors." and that it has no bearing at all on what is "fair and equitable" in the sense of what this topic is about in the first place which is creditors, deptors, and all affected parties sharing equally when a debtor proposes to modify a CBA under section 1113.

 

[GadgetFreak]

You are quite right clarity is not the issue at all, nevermind that your statement "And I have very little doubt that they are in fact higher" was false, what is at at issue is your statement "But if it does they are not going to have a hard time proving they are fare and equitable if their labor costs are higher than their competitors." and that it has no bearing at all on what is "fair and equitable" in the sense of what this topic is about in the first place which is creditors, deptors, and all affected parties sharing equally when a debtor proposes to modify a CBA under section 1113.

[post="179466"][/post]​

Okay, now I understand what you are asking. What I am saying is that you have said that "Moreover, the concessions sought from various parties “must be examined from a realistic standpoint. â€￾ " I am saying that a judge, when seeing creditors standing to lose their money and employees with higher labor costs than the competing companies will believe that the concessions requested of labor will be acceptable to protect the creditors. A judge, from "a realistic standpoint" will think it is "equitable" to have a competitive labor cost structure in order to protect creditors. The judge isnt there to protect the employees. The judge is there to protect the creditors and I dont think they will think forcing a labor cost that is similar to others in the marketplace to be a problem. They can argue that it is the going rate. Whether it is enough, or whether they should cutting other costs are things that will also be examined. But I dont see them having much of a problem cutting labor costs to the same rate as say Southwest since that is the main competition in one of the major markets.

 

[usairways_vote_NO]

Again you are wrong regarding about how out of line labors costs are compared to major competitors including Southwest.

And again your argument about "equitable" in regards to competitors has no bearing on what this topic is about , that being "fair and equitable" for all affected parties.

I guess I need to explain what that means and that is if Usair seeks to modify the CBA's then whatever they seek to modify them to avoid liquidation they must equally share the pain and financial burden with all affected parties. As for just one example, in the latest round of consession talks no one knows if management has shared anything as far as a financial burden so how would they company has a leg to stand on as far as abrogating anything?

Section 1113
Section 1113. Rejection of collective bargaining agreements

(a) The debtor in possession, or the trustee if one has been
appointed under the provisions of this chapter, other than a
trustee in a case covered by subchapter IV of this chapter and by
title I of the Railway Labor Act, may assume or reject a collective
bargaining agreement only in accordance with the provisions of this
section.
(B)(1) Subsequent to filing a petition and prior to filing an
application seeking rejection of a collective bargaining agreement,
the debtor in possession or trustee (hereinafter in this section
''trustee'' shall include a debtor in possession), shall -
(A) make a proposal to the authorized representative of the
employees covered by such agreement, based on the most complete
and reliable information available at the time of such proposal,
which provides for those necessary modifications in the employees
benefits and protections that are necessary to permit the
reorganization of the debtor and assures that all creditors, the
debtor and all of the affected parties are treated fairly and
equitably; and
(B) provide, subject to subsection (d)(3), the representative
of the employees with such relevant information as is necessary
to evaluate the proposal.
(2) During the period beginning on the date of the making of a
proposal provided for in paragraph (1) and ending on the date of
the hearing provided for in subsection (d)(1), the trustee shall
meet, at reasonable times, with the authorized representative to
confer in good faith in attempting to reach mutually satisfactory
modifications of such agreement.
© The court shall approve an application for rejection of a
collective bargaining agreement only if the court finds that -
(1) the trustee has, prior to the hearing, made a proposal that
fulfills the requirements of subsection (B)(1);
(2) the authorized representative of the employees has refused
to accept such proposal without good cause; and
(3) the balance of the equities clearly favors rejection of
such agreement.
(d)(1) Upon the filing of an application for rejection the court
shall schedule a hearing to be held not later than fourteen days
after the date of the filing of such application. All interested
parties may appear and be heard at such hearing. Adequate notice
shall be provided to such parties at least ten days before the date
of such hearing. The court may extend the time for the
commencement of such hearing for a period not exceeding seven days
where the circumstances of the case, and the interests of justice
require such extension, or for additional periods of time to which
the trustee and representative agree.
(2) The court shall rule on such application for rejection within
thirty days after the date of the commencement of the hearing. In
the interests of justice, the court may extend such time for ruling
for such additional period as the trustee and the employees'
representative may agree to. If the court does not rule on such
application within thirty days after the date of the commencement
of the hearing, or within such additional time as the trustee and
the employees' representative may agree to, the trustee may
terminate or alter any provisions of the collective bargaining
agreement pending the ruling of the court on such application.
(3) The court may enter such protective orders, consistent with
the need of the authorized representative of the employee to
evaluate the trustee's proposal and the application for rejection,
as may be necessary to prevent disclosure of information provided
to such representative where such disclosure could compromise the
position of the debtor with respect to its competitors in the
industry in which it is engaged.
(e) If during a period when the collective bargaining agreement
continues in effect, and if essential to the continuation of the
debtor's business, or in order to avoid irreparable damage to the
estate, the court, after notice and a hearing, may authorize the
trustee to implement interim changes in the terms, conditions,
wages, benefits, or work rules provided by a collective bargaining
agreement. Any hearing under this paragraph shall be scheduled in
accordance with the needs of the trustee. The implementation of
such interim changes shall not render the application for rejection
moot.
(f) No provision of this title shall be construed to permit a
trustee to unilaterally terminate or alter any provisions of a
collective bargaining agreement prior to compliance with the
provisions of this section.

 

[GadgetFreak]

Sorry, this doesnt change anything in my mind. What I am saying is that 1) US labor cost are higher than Southwest and 2) that US will be able to convince a judge that the going rate for labor cost is defined by the competition. As a result forcing US employees to meet those numbers will help protect creditors and cannot possibly determined to be unfair since it is the going rate for that labor. The main purpose of these proceedings are to protect the creditors. To a certain degree all the trustee or whoever has to do is show they are not really screwing labor in protecting the creditors. And if they are giving labor what has been openly agreed to in the marketplace a judge isnt going to think that is screwing them. I dont think it is as complicated as you are making it. Nothing in the text you have placed in bold type or elsewhere in what you pasted in makes me think otherwise.

 

[cavalier]

usairways_vote_NO:

Can you avoid the hit if the bus work is lost and added to that there is indeed a 30% across the board job cut. If you can't then this is a waste of energy better put to a new future, and if you can withstand these severe blows then my best wishes to you as you endure the storm. A lot of us less then 20 year and something employees will no longer be part of this drama, which is no big surprise to anyone. Duh

It was fun while it lasted. I was just talking to a cleaner friend of mine who is my neighbor, he has a ton of time and feels he is finished, another neighbor working catering is looking to retire anyway, yet another neighbor has been on OJI for three years and knows he’s gone and why he is riding the OJI out! I Love It….tongue in cheek of course.

 

[cavalier]

Sorry, this doesnt change anything in my mind. What I am saying is that 1) US labor cost are higher than Southwest and 2) that US will be able to convince a judge that the going rate for labor cost is defined by the competition.

[post="179540"][/post]​

So in a nut shell: Even though LUV’s mechanics will be making $40 and hour in the coming years the remaining U mechanics will be making half that, well a judge doesn't care. Maybe you're dead on spot? Probably are which is sad.

 

[tadjr]

Sorry, this doesnt change anything in my mind. What I am saying is that 1) US labor cost are higher than Southwest and 2) that US will be able to convince a judge that the going rate for labor cost is defined by the competition.

[post="179540"][/post]​

US vs WN agent compensation comparison

Read this and see if it does anything for you. US vs WN agent info. This is why the agents are not going to willingly accept a $13.10/hr pay. This isnt even close to our competitors. B6 is $20/hr topout, FL is $16.75/hr and WN is going to be over $24 next year. Just how many markets are we competing against HP in vs these three carriers? Forget all the legacy carriers (who are between $19-22 range). There is a difference between competitive salaries and what is being proposed for the agent class. IMO there is NO comparison.