Haven't Heard About the Extra 4% in Equity to be Held Aside?

[FWAAA]

I'm just curious did the pilots or the flight attendants give equity shares to their early outs, SIS and other retirees that were on the property when AA declared BK?

The APFA did not exclude the early outs.   Those on the property when the bankruptcy contract was ratified (August 19, 2012) were eligible:
 
http://www.apfa.org/distribution-of-the-3-percent-equity-claim
 
http://blogs.star-telegram.com/sky_talk/2012/08/apfa-divies-up-equity-stake-among-flight-attendants.html
 
The APFA did not treat the equity claim as compensation for future losses - rather, they treated it as compensation for years and years of lower pay.   That's consistent with most prior airline bankruptcy equity situations.
 
The pilots did not have early-outs like the TWU and APFA did.   The pilots viewed the equity as compensation for forward-looking concessions from the effective date of their new contract, January 1, 2013, unlike the APFA and unlike most other unions in airline bankruptcies. 
 
https://public.alliedpilots.org/APA/LinkClick.aspx?fileticket=rdjRMvTCEns%3d&tabid=1101&mid=2563
 
The TWU excluded the early out retirees from the equity distribution, but does the TWU claw back the equity in case a mechanic or fleet service worker retires or resigns immediately after receiving their equity distributions?    If not, why not?   No doubt that will be an argument used by the early out retirees to poke holes in the TWU's claim that the equity is forward-looking compensation.   Have no idea whether that argument will carry the day.   

 

[NYer]

I'm just curious did the pilots or the flight attendants give equity shares to their early outs, SIS and other retirees that were on the property when AA declared BK?

 
They also had cut off dates. The APA had their pilots submit an Arbitration in which the APA won. The APFA had a more restrictive plan in which their Members on IOD or any other unpaid leave did not get shares.

 

[FWAAA]

They also had cut off dates. The APA had their pilots submit an Arbitration in which the APA won. The APFA had a more restrictive plan in which their Members on IOD or any other unpaid leave did not get shares.

The APFA divided the equity based on W-2 income, so those on unpaid leaves didn't get any shares.    The key point you didn't mention is that the APFA did not exclude those who were active on August 19, 2012 (ratification date) who chose the early out.   If they were in active status on the date the membership ratified the concessionary agreement, they received equity even if they opted for the early out incentive.

 

[NYer]

The APFA divided the equity based on W-2 income, so those on unpaid leaves didn't get any shares.    The key point you didn't mention is that the APFA did not exclude those who were active on August 19, 2012 (ratification date) who chose the early out.   If they were in active status on the date the membership ratified the concessionary agreement, they received equity even if they opted for the early out incentive.

 
They received shares if they had income. So your point about the EO getting shares is true, but their overall distribution process was more restrictive and prejudiced in that it excluded or penalized people who did not take the Early Out more aggressively than those that did, but didn't have any income such as those on IOD status, flight attendants that took "overage" leaves and reserve flight attendants. Specifically for the APFA, that means they decided to give those F/A's leaving more shares than many of the F/A's that actually stayed and are on their seniority list.

 

[Bob Owens]

About $50M

So if 14% equals $50 million and 12.5% is set aside to satisfy the claims if awarded that means 1.5% is to cover legal fees. $5.3 million seems to be a pretty steep price to pay for a case that has no merit. That's double what the whole BK process cost the Union, legal fees, negotiations costs, experts etc.

Spread out over the membership of 20,000 AA/TWU $5.3million comes out to $265 per member. That may BK some Locals, to offset that I think that all the funds that the company paid back to the Union should be used to pay these fees. If some locals have to access a temporary increase in dues to cover it at least the members get to write that off on their taxes but they would get the shares. Using the monies that were returned to the Union from the company would knock it down to around $100 per member, and maybe they would seek out a law firm that would give them a better deal if they have a stake in it. $5.3 million is obscene.

Right now you are saying that the members should be OK with the Union hiring a Law firm that the members will pay for directly out of their Equity stakes, the members have no say in it and the people who chose the Law firm are not elected by the members. I say fine, they pick the Law firm and with our dues money the law firm gets paid, then the powers that make the decisions of who to hire have more of a stake in making sure that it gets done without excessive charges to the members.

 

[Bob Owens]

The APFA divided the equity based on W-2 income, so those on unpaid leaves didn't get any shares.    The key point you didn't mention is that the APFA did not exclude those who were active on August 19, 2012 (ratification date) who chose the early out.   If they were in active status on the date the membership ratified the concessionary agreement, they received equity even if they opted for the early out incentive.

Did the Pilots receive a financial incentive to leave? If not that's a huge difference, since the concessions package had a price, anything added had to be paid for somewhere else, that $40k that was given to those who left was in fact financed through additional concessions from those who stayed. I say let anyone who left give back what they received and then they can get a share of the equity. Otherwise we are getting hit twice, once for financing their Early Out with additional concessions, then with having to give them a share of the equity that only comes out to less than one years worth of concessions on a six year deal.
 
Our retirees chose the "bird in the hand" option, now that they have that its wrong for them to say they want the "two in the bush" that we caught as well.  

 

[AANOTOK]

C'mon Bob, $27 or $265...what's the difference? Heck, Reality say's the most we could be "moaning" about is $1500 to $2000 per member...who can't stand have that paltry amount taken away from them!!

 

[Bob Owens]

The decisions were made by the union, and by the members of the Equity Committee which were also Presidents of the Locals. In one of the lawsuits filed, those Presidents and their Locals have also become defendants...so do you also advocate that the Locals' treasury should foot the bill to defend those lawsuits....If you do, then you know full well some of the Locals (if not all) could be left bankrupt in the event the lawsuits are successful.

The legal fees will have to be paid either way. The members should not be charged twice for the same thing.

 

Then if you want to argue that the legal fees should be taken from the International funds then the technicality of the TWU being the creditor and not the Members would be a legal fight you'd have a hard time getting over.
 

 
Who does the CBA belong to? That does raise an interesting question in light of the IAM/TWU Association. We have been told that when it goes out for a vote the question will be "Association" or "No Union" and we no longer have a Union or a contract if we vote against the Association.So if the Contract belongs to the members, which is what you are saying in this instance and I agree based on other decisions such as the fact that when members change representation they are still stuck with the same contract,  then what we were told about voting against the Association simply is not true, the Union cant throw an ultimatum in front of the members and say if you don't play the way we tell you to we will leave and take our contract (and equity built up with the members dues) with us. The contract belongs to the members and the Union administers the contract on behalf of the members.  I'm sure Mark Richard will be out there spreading lies like he did during the BK process in order to start a panic but the contract belongs to the members, and the Union can not simply walk away from them if the members do not endorse everything the Union wants them to.
 
You may be confusing this with another argument, over who owns administrative rights over the contract. "Administrative rights over" is usually left out.


 

The CBA's belong to the TWU International and therefore, technically, the Equity does also. Although for these debates, I'm sure you'd disagree the TWU owns the CBA.
 

No the CBA belongs to the members, the International administers the contract and can make decisions as far as deciding where those assets go. Jim Little could have stepped in at any time and said that the retirees get equity, legally we would lose that battle if we went to court because we gave the TWU the right to make such decisions when they were elected to represent us in 1946. The Union  and Company made that argument when we took the Union to court over the 2003 concessions and the court agreed, although we own it, they get to administer it.  Which is another reason why the retirees will likely lose.
 
The question I raised was should we have to pay twice for the same job? The Union represents us, we pay dues for that, we should not have to pay separately for the defense of the Union for lawsuits brought against the Union due to administrative decisions the Union made-our dues should cover that. If the Union runs out of money they have the ability to raise dues to cover costs, at least we can write that off on our taxes, but we should not lose equity to pay for representation. If we lose equity because the court decides that retirees are in fact entitled to the bird in the hand and the two in the bush so be it, the court determined we were never entitled to it, but the legal fees should not be paid for with our equity on top of that.

 

[NYer]

So if 14% equals $50 million and 12.5% is set aside to satisfy the claims if awarded that means 1.5% is to cover legal fees. $5.3 million seems to be a pretty steep price to pay for a case that has no merit. That's double what the whole BK process cost the Union, legal fees, negotiations costs, experts etc.Spread out over the membership of 20,000 AA/TWU $5.3million comes out to $265 per member. That may BK some Locals, to offset that I think that all the funds that the company paid back to the Union should be used to pay these fees. If some locals have to access a temporary increase in dues to cover it at least the members get to write that off on their taxes but they would get the shares. Using the monies that were returned to the Union from the company would knock it down to around $100 per member, and maybe they would seek out a law firm that would give them a better deal if they have a stake in it. $5.3 million is obscene.Right now you are saying that the members should be OK with the Union hiring a Law firm that the members will pay for directly out of their Equity stakes, the members have no say in it and the people who chose the Law firm are not elected by the members. I say fine, they pick the Law firm and with our dues money the law firm gets paid, then the powers that make the decisions of who to hire have more of a stake in making sure that it gets done without excessive charges to the members.

You're already assuming the fees will total the amount you quoted and that they have already been spent. Cart before the horse.

 

[AA-MRO.COM]

With the twu funny math you will be lucky to get back any of that 14 percent even if the twu wins the lawsuit. Its the top secret formula...

 

[Bob Owens]

Well its pretty much a given that if they know there is $5.3 million to get they will find a way of getting it, especially when the people who are paying it have no say in any of it.  Lets face it, on the Road show we were told that the 5% was to cover any lawsuits, and it was expected that the retirees would sue, now its up to 14%. So being that it went from 5% to 14% we should assume that the legal expenses will also be more than you are assuming and as much as the court allowed. When you are rolling downhill it makes sense to put the cart before the horse, and we have been tumbling downhill for quite some time. Win or lose those expenses should be covered by the Union not our equity.

 

[Bob Owens]

The TWU excluded the early out retirees from the equity distribution, but does the TWU claw back the equity in case a mechanic or fleet service worker retires or resigns immediately after receiving their equity distributions?    If not, why not?   No doubt that will be an argument used by the early out retirees to poke holes in the TWU's claim that the equity is forward-looking compensation.   Have no idea whether that argument will carry the day.

The guy who resigned the day after getting the $10k in equity did not get the $40k for the EO. He was there for the window to get the equity but did not leave during the window to get the $40k.

If retirees are entitled to the Equity then why cant I get the $40k if I leave now?

 

[NYer]

Well its pretty much a given that if they know there is $5.3 million to get they will find a way of getting it, especially when the people who are paying it have no say in any of it.  Lets face it, on the Road show we were told that the 5% was to cover any lawsuits, and it was expected that the retirees would sue, now its up to 14%. So being that it went from 5% to 14% we should assume that the legal expenses will also be more than you are assuming and as much as the court allowed. When you are rolling downhill it makes sense to put the cart before the horse, and we have been tumbling downhill for quite some time. Win or lose those expenses should be covered by the Union not our equity.

 
We didn't assume the need was going from 5% to 10%, that was brought about because the plaintiffs in the lawsuits "say" they're supposed to get 10% of the total. Then the 10% to the 14% was brought about because the plaintiffs said the 10% wasn't enough and were ready to file an injunction for the entire distribution to be held.
 
So the legal alternative to not raising the original 5% to 14% would be to have the entire distribution on hold until this entire issue is resolved. Is that a better alternative...I don't believe most would agree to holding everything is better than holding 14%.

 

[NYer]

 
With the twu funny math you will be lucky to get back any of that 14 percent even if the twu wins the lawsuit. Its the top secret formula...
 

 
The formula was shared at every "roadshow" throughout the system and even bob-las has an equation using the formula.

 

[bob@las-AA]

 
The formula was shared at every "roadshow" throughout the system and even bob-las has an equation using the formula.

Thanks NYer,
 
First left click and drag then "CTRL+C"  on your appropriate formula and copy it from this post.
Then Past it into any cell in Excel then hit ENTER.
To change the Wage and years, go to the top to the formula bar and alter the info and presto changeo you now have the number of shares you are to allegedly to receive.
 
M&R
 
=(23000000*0.2291)*((.5*32.75/350000)+(.5*15/215000))+((23000000*0.0981)*0.00009400108363985784)+407+29+((23000000*0.0183)*0.000094)
 
 
 
 
FSC
 
=(23000000*0.158)*((0.5*21.46/200000) + (0.5*15/190000)) + ((23000000*0.0676)*0.000106501499600557) + 307 + 29
 
 
Sorry part timers this formula only is appropriate for the Full timers.