Interesting quotes from the courtroom.....

[ualdriver]

If this whole topic wasn't so serious it would almost be comical......


DL Attorney was going on about the non-pilot employees losing their
retirement. Judge says she doesn't care. DL Attorney goes for "fair
and equitable" angle and "44,000 poor DL employees". She says, "they
chose not to have a union, and they have to live with the fact that
anything beyond wages is a gift from DL. DL took that plan from its
employees ..... not me. Do you want me to play the large or small
violin? The pilots chose to unionize, so they're here [in court].
The freezing of that [non-pilot] plan will have nothing to do with my
decision in this case".

DL Attorney put on his outrage act to the point that she literally
had to shout him down. She shouted into her mike, "shut up".

Judge makes several comments regarding, "don't put too much stock in
the time lines associated with 1113. This is a complicated case."

DL Attorney - your honor, according to the statute, on December 16,
we will be free to act on our motion, lacking a ruling from you".

Judge - you want to bet?

DL Attorney - that what the statute says, your honor.

Judge - On Dec 15, if we're not through, I'll arrange with the
parties for an extension of the deadline.

DL Attorney - we will not be agreeable to that.

Judge - I don't think you'll like what happens if you're not.

Judge then closed subject with a lecture on how an 1113 proceeding
could have the "taint of union busting" about it .... and that she
had to be very careful to ensure that such a motive was not what was
driving a company in her court.

****************

Judge to DL CFO Edward Bastian: "Is it not possible for you to give a
simple, straight answer"?

****************

Judge again took company attorney to task for not producing what she
requested last session: the costing of the "non-negotiable" items
which DL had claimed were not economic items ..... scope relief, min
block hours, code share, etc.

****************

Judge referred to company's 79 seat a/c proposal as "outsourcing DL
pilots' jobs".

****************
Judge refused to listen to DL testimony regarding what non-pilot
employees had given prior to 2004 Plan, when pilots gave 70% of total
wage cuts. Her comment was that what happened in the 3 prior years
(pilot raises) was no more germane than what happened in the the 3
years prior to that. She states that the "fair and equitable" in this
this case is about what has happened beginning with the 2004 cuts.

***************
When DL attorney attempted to deflect her frequent shots at the $2.4B
stock buy back .... by explaining that DL mgmt did this in a noble
attempt to raise the stock price for employees holding options .....
judge commented that she imagined that upper mgmt had a great many of
those options also.

****************
ALPA attorney asked CFO Bastian if DL had a contingency plan for a
possible pilot strike. CFO replied, "we have a legal opinion that a
strike would not be allowed under the RLA". Judge interrupted to ask,
"What does the RLA have to do with this". CFO repeats his statement.
Judge says, " I don't believe the Federal courts have the power to
enjoin a strike. I know I certainly don't."

 

[FWAAA]

As I posted the other day in a different thread - it is fast becoming apparent that this judge is in way over her head. Lord help DL with her at the helm.

Have to agree with the DL lawyer. Under the statute, DL can act unilaterally on Dec. 16. On the stock buyback - she's showing her stupidity. Nearly every company in bankruptcy is there because they spent their cash in years past in ways that don't look so good today, especially with the hindsight that several years provides.

 

[oldiebutgoody]

As I posted the other day in a different thread - it is fast becoming apparent that this judge is in way over her head. Lord help DL with her at the helm.

Have to agree with the DL lawyer. Under the statute, DL can act unilaterally on Dec. 16. On the stock buyback - she's showing her stupidity. Nearly every company in bankruptcy is there because they spent their cash in years past in ways that don't look so good today, especially with the hindsight that several years provides.

That's about the stupidest thing I've read in a long time. All the judge has to do is find in favor of the Pilot Union (not saying she would, but she COULD, and the company knows it). She can do that simply because of the uncooperative attitude of the company. Sounds like DL management had better do their homework, or, have a plan B. As for the buyback, DL's case has ABSOLUTELY NOTHING to do with what anyone else has done in this regard, except for the obvious fact that all the bankrupt, miserably mismanaged companies did the same thing, most likely to make a quick buck for somebody (like management?). Sounds like DL is going to have an interesting ride through chapter 11. If anything, it's refreshing to see that this judge wants to take the time to understand all the issues, rather the the "fast track" system US Airways used, and ultimately required 2 trips through.

 

[WorldTraveler]

Actually, most of DL's other non-labor motions are moving rather smoothly through the bankruptcy process - some leases have already been renegotiated and lenders are agreeing to extensions for the negotiating process on dozens of others.

You have to read all of these comments in light of Judge Prudence's comments early on in the case saying that DL pilots were overpaid. Now all of the sudden, she seems to be swinging her wrath toward the company.

DL will get what it wants or close to it in bankruptcy because they are not asking for something that is not permitted under the law. Company management's primary responsiblity now is to protect the value of the estate for the creditors and that is exactly what they are doing.

Her tirades are costly when lawyers are billing DL at $1000/hr but that is unfortunately the price of being in bankruptcy.

I'm sure Jerry wishes he had not trusted Leo as much as he did.

 

[Busdrvr]

First, in retrospect, I think a lot of her earlier comments re pilot pay were taken out of context. now to her current comments.

Consider what BK is NOT. It is not Christmas for management. If the judge's job was to give them everything they want without question, well..., the judge would not HAVE a job. The judge's job is consider those items the NEEDS to exit BK. The judge has a rsponsibility to those people the mangement screwed with it's bad decisions. The employees will not get to go in front of the judge if Delta makes $10 Billion the year after BK exit and say "lets throw out our CONTRACT, we want the old one back". Because of this, the judge has a resonsibility to the employees to ensue they are treated fairly, and the cuts from a CONTRACT that DAL SIGNED are no more than what is REQUIRED.

Here is what happened. The arrogant overpaid little pr1ck lawyers DAL hired got a little too arrogant and overstepped. They made "non-economic" demands (no such thing) of the pilots and then effectively insulted the judges intellegence by suggesting that they needed these "items" in order to be economically viable... (huh?!... :huh: ). Will they get much of what they want? Surely. But this was a lesson in humility and a WARNING. Get real, or go home.

 

[TheDog2004]

Isn't this the same judge DALPA wanted removed for bias?

She's trying to keep these guys honest. Both the management dolts and the union clods.

 

[luv2fly]

Isn't this the same judge DALPA wanted removed for bias?

Yes it is, and the request was made because most of what was said early on was directed entirely at the pilot group. It leads me to believe she is trying to make both sides realize the best way to solve this is by sitting down at table outside the courtroom.

 

[avek00]

A little bit of context might be useful here:

1. Judge Beatty is being asked to do something that judges HATE to do, with a passion - impose her judgment in a circumstance where the parties (Delta & DALPA) are better positioned to reach a mutually acceptable outcome.

It is ingrained in law students from DAY ONE of 1L contracts class that it is almost universally preferable for parties to bargain amongst themselves than to have courts impose an outcome based on default rules. Beatty absolutely wants management and the pilots to reach an agreement, and her veiled comment about the possibility of a denied abrogation motion was made in that regard.

2. The Delta 1113© is unusual in that it was filed rather early in the bankruptcy process - typically, companies tend to seek 1113(e) motions for temporary pay cuts early on, holding off on 1113© until the other elements of a bankruptcy emergence strategy has come into place - doing so makes it easier to show that 1113© relief is indeed necessary for a succesful reorganization of the enterprise. Delta's chances of prevailing on the instant motion are harmed by the fact that the company cannot readily point to someone like an emergence investor who has made the money contingent upon a specified set of labor cost cuts.

 

[WorldTraveler]

You are largely correct, avek00. However, DL is in a difficult position because they are moving quickly to shore up their business. They have to win what they are going to win from the pilot group now before there are positive signs of turning the company around. DL is moving fast because it is losing money at a very high rate of speed now but they already had a plan in place to turn things around the day the filed for bankruptcy. The size of the losses announced today have to be recognized in light of the price of fuel in late September and October. And that is why ALPA is fighting hard to convince the court that fuel prices as seen in the post Katrina era are not reflective of what lies ahead. I'd be willing to agree with them if there was a mechanism to adjust other costs (including wages) should fuel prices surge again as I am convinced they will next summer again when the Gulf coast gets slammed by another round of hurricanes.

 

[avek00]

They have to win what they are going to win from the pilot group now before there are positive signs of turning the company around.

Thing is, that won't necessarily cut it under Section 1113. Here's the nine-part test:

"In regard to the requirements of that section [1113], courts have historically applied the nine-part test enunciated in In re American Provision Co., 44 B.R. 907, 909 (Bankr. D. Minn. 1984):

1) The debtor in possession must have made a proposal to the union;

2) The proposal must be based on the most complete and reliable information available at the time of the proposal;

3) The modification must be necessary to permit reorganization;

4) The modification must provide that all affected parties are treated fairly and equitably;

5) The debtor must provide the union with such relevant information as is necessary to evaluate the proposal;

6) The debtor must have met with the collective bargaining representative at reasonable times subsequent to making the proposal;

7) The debtor must have negotiated with the union concerning the proposal in good faith;

8) The union must have refused to accept the proposal without good cause; and

9) The balance of the equities must clearly favor rejection of the agreement."

Element #3 requires the cuts to be a NECESSITY to permit reorganization. Such necessity can be shown explicitly, as in the case of a reorganization financier who requires labor cost cuts in the context of an otherwise bona fide plan of reorganization, or it can be inferred from the facts and circumstances of the company's reorganization efforts.

Delta cannot show an explicit need for the abrogation - the company has not secured emergence financing, has not completed all cost-cutting agreements with the creditors and lessors, and has not otherwise demonstrated compelling financial distress that would result in liqudation but for 1113© relief.

Therefore, Delta must try to show that the necessity for 1113© relief can be reasonably inferred from the facts and circumstances of its bankruptcy case. It is true that jet fuel costs are still at record levels, and that the company's revenues have reflected ongoing weakness in yields. However, the company has numerous avenues by which to pursue further cost relief - it can impose further cuts on its nonunion workforce, and continue seeking relief from its lessors and creditors, among other things. There is no question that Delta management would prefer to be released from the obligations present in the DALPA contract - however, there is a substantial difference between what is desirable for profitable operation versus what is necessary for reorganization, and Delta's request for 1113c struggles and likely fails to meet the necessity burden.

 

[Falco]

Of course, all this is posturing. In the end, the pilots will have their pay cut.

 

[luv2fly]

Of course, all this is posturing. In the end, the pilots will have their pay cut.

Maybe so. We just don't think it should be 19% on top of a 32% cut.

 

[FWAAA]

Maybe so. We just don't think it should be 19% on top of a 32% cut.

Combined, they equal a little more than 45% - that's a big haircut.

 

[luv2fly]

Combined, they equal a little more than 45% - that's a big haircut.

That's a buzz cut. 😉

 

[NewHampshire Black Bears]

I ABSOLUTELY love where Judge Beatty told the DL lawyer, (something to the effect) "that DALPA has "NO" $ obligation
to the "other NON-UNION employees" !!

That was definitely a FAIR and HONEST reply !!!!!!!!

NH/BB's