Q. And did the parties, in fact, reach an agreement regarding the termination of the pilot pension plan?
7 A. Well, not immediately we didn't. We fought the termination notices and the idea that they could simply come out from under the deficit at all stages of the federal government. We tried to engage the Department of Transportation and the White House and some aid to extend the deficit over a three-year period to a 30-year period.
15 We tried to engage legislative branch and Senator Spectrum and Senator Fore (phonetic) and others for legislation. Because, apart from the deficit, that -- the deficit was being created in part because the contingent liability interest rate was dropping. The 30-year T-bill was no longer being sold by the government, the benchmark, the CLIR would be used from. And the legislation that Congress had passed temporarily three years earlier, was expiring in 2003. So there was a large argument over which interest rate they would use to make a present value calculation for that stream of payments.
7 There were number of different assumptions going around. We engaged Congress. And we also engaged the bankruptcy court in an extensive hearing there in Alexandria where we opposed the Company's alleged -- their attempt to meet the financial distress test set up in ERISA itself so that the pension benefit could be terminated. And also their allegation at the time that ALPA had in fact already agreed to the termination of the pilot defined benefit plan, which we had not. And we fought that in the bankruptcy court. And that lasted throughout February. And at the end of February, beginning -- I believe it was March 1, the judge issued a bench decision wherein they agreed with us, with ALPA, that we had not agreed to the termination of our plan in the previous concessions, that is the summer 2 Restructuring Agreement, or Letter 84.
3 But he did in fact find that the Company had met the standards of the law, the ERISA law, had met the standards of financial distress. And just that finding was devastating for us. And -- because largely, it meant that the PBGC could have come in and involuntarily terminated our plan whether we liked it or not. And so with that as a backdrop, the MEC resolved that we, the Negotiating Committee, should engage the Company at the bargaining table to see if we could reach an agreement if we were to agree to the termination of our DB plan, agreement to the terms of the follow-on DC plan, which we were also made aware then because it was a follow-on plan, would also have to be approved by the PBGC.
18 So by mid-March of 2003, we were engaged with the Company negotiators over the terms of what would become Letter of Agreement 85 for a defined contribution plan for the pilots, which we would call the individually tailored defined contribution plan. And also agreed to the termination of the defined benefit plan.