USA320Pilot
Veteran
- Joined
- May 18, 2003
- Messages
- 8,175
- Reaction score
- 1,539
What’s next?
US Airways has entered bankruptcy and the company has made agreements with the ATSB and a few creditors to use some of the ATSB money for DIP financing. Without adequate cash in bankruptcy it will be very difficult to exit. I believe that having contracts with the unions would not only give the unions more protections but would allow the access to more cash for DIP financing.
For labor the next step in the process will be a Section 1113 (e) of the Bankruptcy Code that states:
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.
Essentially, 1113 (e) allows a company in bankruptcy to ask a judge to impose temporary wages, work rules and benefits if the continuation of a company’s business is at risk without immediate relief. If temporary modifications are imposed by a judge, they are not a matter for negotiations with the Union and are not subject to member ratification.
Regards,
USA320Pilot
US Airways has entered bankruptcy and the company has made agreements with the ATSB and a few creditors to use some of the ATSB money for DIP financing. Without adequate cash in bankruptcy it will be very difficult to exit. I believe that having contracts with the unions would not only give the unions more protections but would allow the access to more cash for DIP financing.
For labor the next step in the process will be a Section 1113 (e) of the Bankruptcy Code that states:
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.
Essentially, 1113 (e) allows a company in bankruptcy to ask a judge to impose temporary wages, work rules and benefits if the continuation of a company’s business is at risk without immediate relief. If temporary modifications are imposed by a judge, they are not a matter for negotiations with the Union and are not subject to member ratification.
Regards,
USA320Pilot