nwa alpa claims

[finman]

Maybe the AFA figures a decent long term contract is better than some quick cash...

Maybe so. I guess if I were in their shoes, I'd take a quick $15-20K in cash over fighting for a few thousand in annual compensation. Maybe if there was a high likelihood of getting a much more favorable contract, it would make sense. But they will not end up with anything materially better than what they are working under now, so they're essentially throwing away $15-$20K. If they had any sense, they would save the fight for the next contract and join in on the benefits of the claims process and the appreciation of the post bankruptcy stock price.

Amazingly, the handful of FA's I've talked to in person were completely unaware of the financial implications of the claims process, and what they were missing out on by not having a negotiated claim.

 

[Kev3188]

Here's the latest info (from 19.Jan.07)....Bold print is my handiwork....


January 19, 2007

"NWA

Update on the Sale of IAM Unsecured Claims and Distribution of Proceeds to IAM Members

The following is an update to all IAM members on the sale through the Bankruptcy Court of 20% of the total $181 million of the IAM's unsecured claims, or approximately $36 million dollars worth of our claims. As most of you know, the $181 million total represents the value of the IAM's unsecured claim as a result of the reduction in our wages and other IAM-related labor costs imposed during Northwest's bankruptcy proceeding. The 20% of claims we were permitted to sell will cover a portion of the approximately year and a half period that we were under the Section 1113(e) reduction in wages imposed by the Bankruptcy Court.

The firm we retained to sell the claims was able to obtain 86.5 cents for every dollar of our claim less their commission. It is anticipated that the sale will be finalized by Tuesday, January 23, 2007.

After consultation with our legal counsel and our financial advisor in Washington, D.C., as well as your District 143 General Chairs, we have developed Guidelines which will be used in the distribution of the proceeds from the sale. Again, this distribution represents a portion of the "emergency" reduction in wages imposed on us by the Bankruptcy Court during the 1113(e) proceeding. Accordingly, those who received income from NWA reflected in a NWA W-2 form during the period of the 1113(e) relief, approximately from November 15, 2005 through June 1, 2006 will be eligible to participate in the distribution. As described more fully below, a calculation will be done to determine the percentage that your NWA W-2 earnings for that period is of the aggregate total of all IAM-­represented employees' W-2 earnings for the 1113 (e) relief period to determine your percentage share of the total distribution.

Once the sale is finalized on Tuesday and the company receives our financial advisor’s calculations based on NWA payroll records, the company, according to our agreement, is required to make the distribution within "ten (10) days following receipt of the allocation data from IAM, but under no circumstances fewer than eight (8) business days following the Closing Date. Northwest shall make a cash distribution directly to individual IAM-represented employees net of all applicable income tax withholdings and payroll taxes (which shall be withheld by Northwest and remitted to the appropriate taxing authorities)."
The following are the Guidelines that will be applied to the upcoming initial distribution and its administration:

Guidelines for Distribution from Sale of First 20% of IAM Unsecured Claims

1. Measurement Period -- Closest payroll period beginning November 15, 2005 to the closest payroll period ending June 1, 2006 -- the approximate Section 1113(e) relief period.

2. Eligible Employees -- IAM-represented NWA employees with NWA W-2 earnings at any time during the measurement period.

3. New Hires -- However, no person hired by the company during the measurement period shall be considered eligible.

4. W-2 Earnings -- W-2 earnings shall be defined as gross earnings paid by NWA for service during the measurement period. Accordingly, compensated military service, long term disability payments and the like are not considered NWA W-2 earnings. Uncompensated personal leave, Family Medical Leave are not included. However, compensated sick leave and OJI leave, for example, shall be considered as part of NWA W-2 earnings. Paid union leave not covered by PULP shall be added to that individual's W-2 earnings total.

5. Retired and Former NWA Employees -- Those who retired or whose employment was terminated with NWA for any reason during the measurement period shall be credited for that period covered by his or her NWA W-2 earnings.

6. Distribution Formula -- An individual IAM member's share of the distribution will be equal to his or her W-2 earnings during the measurement period divided by the aggregate of the total W-2 earnings of all eligible participants during the measurement period.

7. Holdback -- Five percent (5%) of the total distribution amount shall be held for a period of 60 days to permit any IAM member to object to the accuracy of the payroll records upon which his or her distribution amount was calculated. Approximately thirty (30) days thereafter, the remainder of the total distribution shall be distributed. Any interest earned on the holdback amount shall be applied to the professional fees and costs incurred by IAM District 143 related to the distribution of the sale of the IAM unsecured claims.Conclusion

We will continue to keep you posted on developments. In addition, I would urge anyone who is working under an IAM agreement but has not yet become an IAM member or agency fee payer to do so immediately to assure that the IAM's and the company's records agree and properly reflect your status to avoid any administrative

(See FOCUS bulletin)"

 

[Kev3188]

Another update (26.Jan.07). The 143 website should also be updated later this evening.


$30 Million IAM Claim Proceeds Received by Company
--------------------------------------------------------------------------------

Slightly more than $30 million, representing the proceeds from the sale of 20 percent of the IAM’s bankruptcy claim, was received by Northwest on Thursday. The Company is working with the IAM to transmit the funds onward to each eligible employee and anticipates that checks representing their individual portion of the sale proceeds will be distributed at or near the end of the first full week in February. “We’re pleased that we could work together with the IAM and other unions for the benefit of their members and our co-workers,â€￾ said Mike Becker, senior vice president – human resources and labor relations. “Acting together allowed us to move quickly to capture the high value these claims are currently commanding in the marketplace.â€￾

The sale was made possible by a January 11th ruling by the bankruptcy court approving motions filed by Northwest to allow unions representing its customer service agents, equipment service employees, reservations sales agents and other employees represented by the IAM, as well as dispatchers, meteorologists and technical writers and trainers, to sell 20 percent of their unsecured claims.

The proceeds from the sale of claims held by the other unions have not yet been received by the company, but Becker said the company is committed to distributing these funds as expeditiously as possible once they're received.

The sales made possible by the January 11th ruling follow a similar sale by ALPA on behalf of its members. Those proceeds have yet to be distributed, but the union announced earlier this week that 88 percent of its members have elected to sell their claims. The proceeds that will ultimately be distributed to each pilot are determined by a formula developed by ALPA.

The union claims were part of the collective bargaining agreements reached between the various unions and the company earlier this year. Collectively, the unions with collective bargaining agreements in place have claims of about $1.1 billion.

As previously reported, Northwest has also filed a claim on behalf of salaried and management employees, and the bankruptcy court will determine the ultimate value of that claim in connection with the finalization of the terms of Northwest's plan of reorganization. Because they do not yet have a ratified agreement with the company, the AFA does not, at present, have an approved claim.

 

[Kev3188]

Update:

Here's the summary of payouts hat will occur on the 7th.

Distribution table (PDF).

Highlights:

Average distribution: $2,014.63

High payout: $8467.28

Low payout: .46


Since I lost roughly $2800 in straight wages alone during the eligible time frame (15.Nov.05-01.June.06), it'd be nice to get at least that back....I'm not holding my breath.

 

[groundcontrol]

Thanks for the update Kev.

 

[Kev3188]

You're very welcome!

By the way, I did the math wrong on my lost wages...For someone topped out during that period, it's closer to $4400....

 

[Kev3188]

Update:

Checks are in as of today (the 7th). If you're active, they'll be either a regular check or via direct deposit, depending on how you're normally paid.

If you're inactive, they'll be mailed to you.

By the way, we were told that NW was "picking up" the 6.2% FICA tax, but it looks like it was taken out of mine?

It's also taxed at the supplemental rate, so be ready for that as well....

 

[finman]

Update:

Checks are in as of today (the 7th). If you're active, they'll be either a regular check or via direct deposit, depending on how you're normally paid.

If you're inactive, they'll be mailed to you.

By the way, we were told that NW was "picking up" the 6.2% FICA tax, but it looks like it was taken out of mine?

It's also taxed at the supplemental rate, so be ready for that as well....

I think they were referrring to the employer portion of the FICA tax, not the employee portion. Since this is not a payroll check, the employer can push the full FICA responsibility (12.4%) onto the employee. NWA chose not to do that for these claim checks, and instead chose to pay the regular employer portion leaving the employee with only the normal 6.2% portion.

 

[big jimmy]

I think they were referrring to the employer portion of the FICA tax, not the employee portion. Since this is not a payroll check, the employer can push the full FICA responsibility (12.4%) onto the employee. NWA chose not to do that for these claim checks, and instead chose to pay the regular employer portion leaving the employee with only the normal 6.2% portion.

That's what makes this company great!