Change of Control, the New American Airlines and the PBGC

[usa1]

http://av-info.faa.g...AN AIRLINES INC

http://av-info.faa.g...=US AIRWAYS INC


http://av-info.faa.gov/OpCert.asp

AMR Certificate Number AALA025A
US Airways Certificate Number USAA105A

 

[usa1]

For business purposes the FAA Operating Certificate has nothing to do with how the company is financially structured in the merger, the OC only has to do with the airline and the FAA, not the articles of incorporation.

Did you read the entire PBGC argument at http://www.pbgc.gov/%5CDocuments%5Capbletter%5CDecision--U.S.-Airways-2011-06-20.pdf

 

[700UW]

And in that letter, it cleary states 100% of assets and liabilities were transferred to US Airways

 

[JFK Fleet Service]

Wonder what our friends across the pond at IAG think.

 

[700UW]

I believe Willy was in favor of the merger.

 

[usa1]

And in that letter, it cleary states 100% of assets and liabilities were transferred to US Airways

In this merger I believe 100% of the assets will be transferred to AMR, soon to be known as American Airlines Group Inc. We will operate on a FAA cert that starts out with the letters AA.

Based on the PBGS's earlier ruling they have to allow us to start out pension if you ask me. If not I see lots of lawyers getting involved on both sides?

 

[JFK Fleet Service]

No,I mean International Airlines Group and now American Airlines Group.

 

[usa1]

US Airways will join list of extinct airlines

http://finance.yahoo.com/news/us-airways-join-list-extinct-233651364.html

 

[mike33]

And in that letter, it cleary states 100% of assets and liabilities were transferred to US Airways

Maybe this is the key and admittance we are looking for...........dated feb 13 from the company to non contract employees



US AIRWAYS RETENTION AND SEVERANCE PLAN FOR PROFESSIONAL MANAGEMENT EMPLOYEES AS DETERMINED BY GRADE
(AND SUMMARY PLAN DESCRIPTION)
EFFECTIVE FEBRUARY 13, 2013 INTRODUCTION
This US Airways Retention and Severance Plan for Professional Management Employees As Determined by Grade (this “Plan&rdquo sets forth the severance benefits available to Covered Employees (as defined below) of US Airways Group, Inc. (“Group&rdquo and US Airways, Inc., a wholly-owned subsidiary of Group (“US Airways” and, together with Group, the “Company&rdquo in the event such Covered Employees are terminated in certain circumstances following the Change in Control (as defined below) contemplated by Group and AMR Corporation.
This Plan is an employee welfare benefit plan subject to the Employee Retirement Income Security Act of 1974, as amended (“ERISA&rdquo. An outline of your rights under ERISA with respect to this Plan is attached to the Plan in Appendix A. This Plan document is also the summary plan description of this Plan. References in this Plan to “you” or “your” are references to Covered Employees of the Company.


I think its over usa1

 

[usa1]

Mike I think this only address management pensions and benefits. I don't think it would have anything to do with PBGC.

US AIRWAYS RETENTION AND SEVERANCE PLAN FOR PROFESSIONAL MANAGEMENT EMPLOYEES AS DETERMINED BY GRADE(AND SUMMARY PLAN DESCRIPTION)


EFFECTIVE FEBRUARY 13, 2013 INTRODUCTION

This US Airways Retention and Severance Plan for Professional Management Employees As Determined by Grade sets forth the severance benefits available to Covered Employees of US Airways Group, Inc. and US Airways, Inc., a wholly-owned subsidiary of US Airways in the event such Covered Employees are terminated in certain circumstances following the Change in Control contemplated by Group and AMR Corporation.

This Plan is an employee welfare benefit plan subject to the Employee Retirement Income Security Act of 1974, as amended. An outline of your rights under ERISA with respect to this Plan is attached to the Plan in Appendix A. This Plan document is also the summary plan description of this Plan. References in this Plan to “you” or “your” are references to Covered Employees of the Company.

http://www.dol.gov/e.../2000029766.htm

http://en.wikipedia....me_Security_Act

Unrelated but interesting read - http://jenner.com/sy....pdf?1320079067

It's amazing to me that you can bust your ass in this industry for 35 plus years and end up like this?

 

[mike33]

Well they could have left the " COC" words out and it would have meant the same thing. But they didn't

 

[usa1]

Actually when I go back and read the PBGC argument made in the Buffalo case I think the change of control language, with regard to management employees helps our case.

In the Buffalo case on page 5 this jumps out at me. Sounds like if management employees were, on paper symbiotically released and rehired by American Airlines Group Inc, they are eligible to start theirs? I would hope our union would file a class action suit if that happens, making sure we can do the same?


Page 5

Under Section 5.2-2 ©, "Eligibility for Normal Retirement Benefits," PBGC will pay normal retirement benefits to a participant who continues to work for the DoPT employer with benefits becoming payable beginning on or after the participant's normal retirement date as defined by plan provisions and in accordance with PBGC policy on annuity starting dates. In addition, PBGC will not suspend benefit payments to a retiree who is reemployed by the DoPT employer on or after his or her normal retirement date. Thus, under PBGC policy, you will become eligible for benefits on or after your norml retirement date as defined by CE Plan provisions.

Would normal mean, normal early date. Could that be why all management employees got a furlough letters last week?

 

[usa1]

AWA, US Airways PBGC Buffalo case .....

On May 19,2005, US Airways Group entered into an agreement and plan of merger with America
West Holdings.

1
To accomplish the merger, US Airways Group created a wholly-owned subsidiary,
Barbell Acquisition Corporation. US Airways Group then merged Barbell into America West
Holdings by exchanging all ofthe shares ofBarbell (which were shares ofUS Airways Group) for all
of the shares of America West Holdings. The stock of America West Holdings was then cancelled,
and any holder of that stock before the transaction received a pro rata amount of US Airways Group
stock. To complete the transaction, Barbell's corporate identity was extinguished and America West
Holdings became a wholly-owned subsidiary of US Airways Group.

2
The merger transaction cannot
be characterized asan asset purchase by America West Holdings. Charts of the pre-merger and post­
merger corporate structures are at Enclosure 3.
US Airways, the company that employed you, was a wholly-owned subsidiary of US Air Group
before and after the merger. Following the merger, US Airways continued to exist as a separate
corporate entity and remained a certificated air carrier and subsidiary of US Airways Group. A W A
was a wholly owned subsidiary of America West Holdings ·before and after the merger. US Airways
and AW A both continued operating after the merger of their respective parent companies. You
correctly note that the merger agreement filed with the SEC states that after Barbell Acquisition
Corporation and America West Holdings merged, Barbell's corporate existens:e ceased and America
West Holding will be the survivor' corporation. This fact does not impact the corporate identity of
your employer, US Airways Inc.
For a period of time after the merger, US Airways and A W A each operated as a certificated air
carrier. On September 25, 2007, AWA surrendered its Federal Aviation Administration ("FAA")
operating certificate and all mainline airline operations were subsequently conducted under
US Airways' FAA operating certificate.

3
A WA transferred substantially all of its assets and
liabilities to US Airways. US Airways Group contributed 100% of its equity interest in America
West Holdings to US Airways. As a result of the transfer, America West Holdings and AWA
became wholly-owned subsidiaries of US Airways. You remained employed with US Airways
throughout these transactions. The transactions did not result in your being employed by a different
employer.
In the supplemental material you submitted you assert the transaction between US Airways and
America West should be characterized as an asset purchase. As already discussed, the Board
disagrees with your assertion. As established by the SEC filings, including the Agreement and Plan
of Merger, the transaction between US Airways Group and America West Holdings was a merger.
America West Holdings was treated as the acquiring company in the merger for accounting purposes
only.

4
The Board concludes that based on all of the evidence presented, you have remained
employed with US Airways, Inc., the Employer as defined by the Plan.

As already discussed, the Board disagrees with your assertion. As established by the SEC filings, including the Agreement and Plan of Merger, the transaction between US Airways Group and America West Holdings was a merger. America West Holdings was treated as the acquiring company in the merger for accounting purposes only. (That last line is BS)

 

[usa1]

NEWS: Statement from PBGC Director Josh Gotbaum on the Merger Agreement between American Airlines and US Airways

http://www.pbgc.gov/...es/pr13-03.html

MORE NEWS: The proposed merger of American Airlines Inc. and US Airways Group Inc. will bring together two airlines with two very different pension plan stories. http://www.businessi...62|63|307|77|82

In early 2012, after American Airlines parent company AMR Corp.'s November 2011 Chapter 11 bankruptcy filing, American said it intended to terminate its four massively underfunded pension plans.

US Airways employees will now have to help fund these 4 frozen plans going forward? After losing so much ourselves. We use to get 14% in our 401k, before the last USAir BK filing? It was reduced to 3%? We lost this 401 contribution for the past 7-8 years. Now we will have to help fund four massively underfunded pension plans? The PBGC should be happy about all this, and just let us go ahead and start drawing ours without an argument. When AMR froze theirs, they the PBGC is billions ahead.

 

[usa1]

Any lawyers in the room. It sounds like they plan to merge American Airlines into US Airways and make it a wholly-owned subsidiary of American Airlines Group Inc.?

The PBGC turn us down last merger. Who will the PBGC say we work for this time, US Airways, US Airways Group or now American Airlines Group Inc.?

Here are the key facts from then and now?


PBGC Ruling On US Airways America West Merger:

May 19, 2005, US Airways Group entered into an agreement and plan of merger with America West Holdings.

To accomplish the merger, US Airways Group created a wholly-owned subsidiary, Barbell Acquisition Corporation. US Airways Group then merged Barbell into America West Holdings by exchanging all of the shares of Barbell (which were shares of US Airways Group) for all of the shares of America West Holdings. The stock of America West Holdings was then cancelled, and any holder of that stock before the transaction received a pro rata amount of US Airways Group stock. To complete the transaction, Barbell's corporate identity was extinguished and America West Holdings became a wholly-owned subsidiary of US Airways Group.

The merger transaction cannot be characterized as an asset purchase by America West Holdings. Charts of the pre-merger and post­ merger corporate structures are at Enclosure 3.

US Airways, the company that employed you, was a wholly-owned subsidiary of US Air Group before and after the merger. Following the merger, US Airways continued to exist as a separate corporate entity and remained a certificated air carrier and subsidiary of US Airways Group. AWA
was a wholly owned subsidiary of America West Holdings before and after the merger. US Airways and AWA both continued operating after the merger of their respective parent companies. You correctly note that the merger agreement filed with the SEC states that after Barbell Acquisition Corporation and America West Holdings merged, Barbell's corporate existence ceased and America West Holding will be the survivor' corporation. This fact does not impact the corporate identity of your employer, US Airways Inc. For a period of time after the merger, US Airways and AWA each operated as a certificated air carrier. On September 25, 2007, AWA surrendered its Federal Aviation Administration ("FAA") operating certificate and all mainline airline operations were subsequently conducted under US Airways' FAA operating certificate.

3 A WA transferred substantially all of its assets and liabilities to US Airways. US Airways Group contributed 100% of its equity interest in America West Holdings to US Airways. As a result of the transfer, America West Holdings and AWA became wholly-owned subsidiaries of US Airways. You remained employed with US Airways throughout these transactions. The transactions did not result in your being employed by a different employer.

In the supplemental material you submitted you assert the transaction between US Airways and America West should be characterized as an asset purchase. As already discussed, the Board disagrees with your assertion. As established by the SEC filings, including the Agreement and Plan of Merger, the transaction between US Airways Group and America West Holdings was a merger. America West Holdings was treated as the acquiring company in the merger for accounting purposes only.

4 The Board concludes that based on all of the evidence presented, you have remained employed with US Airways, Inc., the Employer as defined by the Plan.

http://www.pbgc.gov/...-2011-06-20.pdf



Flash forward, to now:


AGREEMENT AND PLAN OF MERGER (American and US Airways February 13, 2013)

WHEREAS, American and US Airways have determined to engage in a strategic business combination whereby Merger Sub - American will be merged with and into US Airways, with US Airways continuing as the surviving entity in such merger as a direct wholly-owned subsidiary of American (the “Merger”

Subject to the terms and conditions of the Merger Agreement, which has been approved by the boards of directors of the respective parties, if the Merger is completed, US Airways stockholders will receive one share of common stock of AMR (“New American Common Stock&rdquo for each share of US Airways common stock. The aggregate number of shares of New American Common Stock issuable to holders of US Airways equity instruments (including stockholders, holders of convertible notes, optionees and holders of restricted stock units) will represent 28% of the diluted capitalization of AMR after giving effect to the Plan. The remaining 72% equity ownership of AMR will be distributable, pursuant to the Plan, to the Debtor’s stakeholders, labor unions and certain employees.

All of the equity interests in the reorganized AMR will be issued solely pursuant to the Merger Agreement or the Plan. All existing AMR common stock and other equity interests in AMR will be cancelled pursuant to the Plan, although such AMR equity holders are expected to receive a recovery in the form of New American Common Stock..

The Merger Agreement provides that, upon consummation of the Merger, ...... The combined company will have its corporate headquarters at AMR’s current corporate headquarters in Ft. Worth, Texas. Immediately after the effective time of the Merger, AMR will change its name to “American Airlines Group Inc.”

http://services.corp...799&fid=8633456