nwa alpa claims

[whaledriver]

Airlines See Value of Bankruptcy Claims Rise

By Ted Reed
TheStreet.com Staff Reporter
12/27/2006 5:35 PM EST
Click here for more stories by Ted Reed




Pilots at Northwest Airlines (NWACQ - commentary - Cramer's Take) have become early beneficiaries of the current round of speculation about industry consolidation.
There haven't actually been any airline mergers recently except for the 2005 combination of US Airways (LCC - commentary - Cramer's Take - Rating) and America West Airlines. But bankruptcy court claims in the Northwest and Delta (DALRQ - commentary - Cramer's Take) cases have soared in value recently, primarily as a result of US Airways' hostile bid for Delta and Northwest's retention of a merger adviser.

Last week, a bankruptcy court judge approved the sale of 20% of the $888 million bankruptcy claim held by the Northwest chapter of the Air Line Pilots Association. ALPA said Saturday that it had sold its claim for 85 cents on the dollar, or $150 million in cash.

"This is positive," said Northwest CEO Doug Steenland, in a recorded telephone message to employees. "The high valuation being put on these claims reflects the confidence investors feel in Northwest's future. The agreement to sell part of the claims reflects our belief that everyone who sacrificed to make our company successful should share in its upside."

 

[Kev3188]

ALPA said Saturday that it had sold its claim for 85 cents on the dollar, or $150 million in cash.

Interesting. Where's the $$$ going to go? 401k's? Pension? Straight to you guys? Some of each?

I ask because we (the IAM) also received permission to sell 20% of our $181 million claim. We've been told that it will either go toward our retirement or "directly to us" (to paraphrase from Radar). Using your ALPA's same .85 on the dollar, that would translate to roughly 31 million back in the kitty.

 

[1withIntegrity]

Last week, a bankruptcy court judge approved the sale of 20% of the $888 million bankruptcy claim held by the Northwest chapter of the Air Line Pilots Association. ALPA said Saturday that it had sold its claim for 85 cents on the dollar, or $150 million in cash.

"This is positive," said Northwest CEO Doug Steenland, in a recorded telephone message to employees. "The high valuation being put on these claims reflects the confidence investors feel in Northwest's future. The agreement to sell part of the claims reflects our belief that everyone who sacrificed to make our company successful should share in its upside."
[/quote]

There seems to be a slight contradiction in this news article, if the sale of their stock by the ALPA pilots is supposed to be such a "positive" thing and as Dougy Steenland says "reflects the confidence investors feel in Northwest's future," then WHY NOT KEEP IT AND SELL WHEN NORTHWEST'S FUTURE IS EVEN BRIGHTER THAN IT IS TODAY??? Or does it actually reflect nothing but the actions of a labor group trying to regroup some of the money this management team stole from them.

Attempting to spin this (legacy) airline into being a "low cost carrier" is like an owner of a Cadilac cutting it in half and now thinks he has a VW...

 

[exnw]

Interesting. Where's the $$$ going to go? 401k's? Pension? Straight to you guys? Some of each?

I ask because we (the IAM) also received permission to sell 20% of our $181 million claim. We've been told that it will either go toward our retirement or "directly to us" (to paraphrase from Radar). Using your ALPA's same .85 on the dollar, that would translate to roughly 31 million back in the kitty.

Who is entitled to this 20%? Are former employees
eligible to redeem some of this money. It seems only
fair I went through the last 5 years with NW I should
receive my share. Also with the 69 stations gone a lot
of people are in the same boat.

What is the 181 million claim for. If I was an employee
with NW during that time I will be pursuing my share.

 

[exnw]

Who is entitled to this 20%? Are former employees
eligible to redeem some of this money. It seems only
fair I went through the last 5 years with NW I should
receive my share. Also with the 69 stations gone a lot
of people are in the same boat.

What is the 181 million claim for. If I was an employee
with NW during that time I will be pursuing my share.

The last 5 years I referred to was the nonsense we all
had to put up with. I put in 22 years with NW.

 

[Kev3188]

EXNW--

Here's the "official" blurb from Radar. it does have some good info, but doesn't answer your questions about furloughed employees. I still haven't found any more info than this:

On Thursday, Northwest filed a motion with the bankruptcy court in support of the IAM's decision to sell 20 percent of its $180 million unsecured claim. The motion is a result of an agreement between the union and the company and, if granted, would clear the way for the proceeds of the sale to go into either IAM employee 401(k) accounts or directly to customer service agents, equipment service employees, reservations sales agents and other employees represented by the IAM. The court has scheduled a hearing on the motion for January 11.
The filing comes approximately two weeks after a similar filing in support of Northwest's Air Line Pilots Association, which in early December sought a similar release from the court to sell 20 percent of its unsecured claim.

“Our ground operations colleagues, pilots and flight attendants have all contributed to the restructuring of the company, and we want all of the members of our team to have the opportunity to benefit as quickly as possible from this claim,â€￾ said Doug Steenland. “The high valuation being put on these claims reflects the confidence investors feel in Northwest’s future - confidence that Northwest employees have instilled by their hard work and sacrifice.â€￾

Both the ALPA and IAM claims were part of the collective bargaining agreements reached between both unions and the company earlier this year.

The unions representing NWA's dispatchers, meteorologists and simulator technicians also have claims worth approximately $4 million. The company would support those groups holding early sales for 20 percent of their claims, as well, should they choose to do so.

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.

The AFA does not yet have an approved claim against the company because it does not yet have a ratified collective bargaining agreement.

Collectively, the unions with collective bargaining agreements in place have claims of about $1.1 billion.

How Bankruptcy Claims Work

Because it is in bankruptcy, Northwest has many claimholders - holders of debt that have not been paid or whose obligations NWA has reduced to market levels. These include aircraft lessors whose aircraft were rejected or whose rent was reduced and vendors, such as hotels with outstanding bills.

Each of these groups, as well as the unions that have ratified labor agreements with Northwest, has what is called a "claim" against the company. The size of those claims is determined according to the amount owed by the company to the claimholder, and in the case of union employees, the amount of the claim was the subject of negotiation and was agreed to by the company. The bankruptcy court approved the ratified collective bargaining agreements, thereby locking in the claim amounts.

When Northwest emerges from Chapter 11, these claims will most likely be satisfied by conversion into newly issued common stock of the company.

During bankruptcy, there is a market in which claimholders can sell their claims to other parties. The amount those other parties are willing to pay for claims can rise or fall based on a variety of factors.

The value of claims against Northwest has risen in recent weeks in part because of the progress made by NWA in its restructuring and also because speculation about mergers in the industry has driven up the perceived value of airlines in general.

The value of claims can rise or fall based on future events and other factors outside the company's control..

 

[Kev3188]

Here's another blurb; this time from iam143.org. It still doesn't address the furloughee question, but I thought I'd post it anyway...

December 29, 2006
NWA

Update on Payment for Unsecured Claims


As President/Directing General Chair Stephen Gordon reported to you on December 13, 2006, once the IAM became aware that certain creditors of Northwest Airlines had been permitted to sell some portion of their unsecured claims prior to Northwest's exit from bankruptcy, PDGC Gordon sought similar treatment for IAM members. Following his discussions with the company, Northwest agreed to permit the IAM to monetize up to 20% of its $181 million in unsecured claims or approximately $36 million worth of our claims. The market price for these claims fluctuates with claims recently trading at between 70 cents and 90 cents per dollar of unsecured claim.

We have been advised by our counsel that Thursday afternoon Northwest's bankruptcy attorneys filed a motion with the Bankruptcy Court seeking approval of the agreement the IAM reached with the company to sell 20% of our claims. A hearing before the Bankruptcy Court has been scheduled for January 11, 2007; and objections, if any, must be filed by January 8. If, as our attorneys anticipate, the motion is unopposed, the Court will approve it shortly after the January 11 hearing.

The firm we have engaged to market our claims has advised that now that the motion pertaining to the IAM has been filed, they will be able to lock in the market price of IAM claims either Friday or Tuesday, depending on when they can get the maximum price for our claims. Once the sale price is known, we will report it to you. Our economic advisor will then calculate the amount each IAM-represented employee is due based on the amount of actual wage concession each employee has made, and a distribution by Northwest will follow.
Needless to say, we are pleased with this positive development in the midst of the long and difficult strain IAM members have had to endure. Let us hope that this is the beginning of a better New Year for those who work for Northwest Airlines.

We will keep you posted on developments.

(Flashpoint Bulletin)

 

[exnw]

Thanks Kev. I also emailed district 143 and am
awaiting an answer from them.

Sounds like current employees will be getting some
money back. Hopefully I will be entitled to some of it.

 

[Kev3188]

Thanks Kev. I also emailed district 143 and am
awaiting an answer from them.

Sounds like current employees will be getting some
money back. Hopefully I will be entitled to some of it.

I talked to my GC on Tuesday. He tells me that it will be divvied up amongst everyone-roughly 11,600 people-so I would assume furloughees will be getting some of it. He also said that rather than a straight division (my term, not his), that it will be alloted on something of a sliding scale depending on how many years you had/have in. This seems to make sense, as someone with 20 years ought to get more than someone with 6 months.

He also mentioned that they will be roughly following the pattern that UAL did with their claim, but didn't know any specifics of how they did it over there.

Lastly, there was an article in the Star Tribune quoting Steve Gordon using the "11,600" number, but I've lost the link....

 

[exnw]

I talked to my GC on Tuesday. He tells me that it will be divvied up amongst everyone-roughly 11,600 people-so I would assume furloughees will be getting some of it. He also said that rather than a straight division (my term, not his), that it will be alloted on something of a sliding scale depending on how many years you had/have in. This seems to make sense, as someone with 20 years ought to get more than someone with 6 months.

He also mentioned that they will be roughly following the pattern that UAL did with their claim, but didn't know any specifics of how they did it over there.

Lastly, there was an article in the Star Tribune quoting Steve Gordon using the "11,600" number, but I've lost the link....

Thanks Kev. Appreciate your response. 11600 is the old
number of IAM represented employees. How many of that
number are left. I guess it will take time for all the
numbers to come in on how many are left from the 40
stations that are staffed by NW. When I left NW I had
bitter taste in my mouth towards the company and the
executives who run it. I have nothing but the utmost
respect for the frontline employees who run the operation
on a daily basis. For that reason I hope NW makes it
through the tough times.
the tough times.

 

[exnw]

I talked to my GC on Tuesday. He tells me that it will be divvied up amongst everyone-roughly 11,600 people-so I would assume furloughees will be getting some of it. He also said that rather than a straight division (my term, not his), that it will be alloted on something of a sliding scale depending on how many years you had/have in. This seems to make sense, as someone with 20 years ought to get more than someone with 6 months.

He also mentioned that they will be roughly following the pattern that UAL did with their claim, but didn't know any specifics of how they did it over there.

Lastly, there was an article in the Star Tribune quoting Steve Gordon using the "11,600" number, but I've lost the link....

I heard back from IAM today. Former employees are
eligible for sale of unsecured debt. Program will be
based on the intitial paycut IAM members took when
bankruptcy judge allowed NW to impose paycuts. I believe
this was back in November 2005. Since I left in April
2006 I am eligible for that time period. Shares will be
determined by financial advisor of the IAM. Since only
20 percent of claims are being sold now then another
80 percent may come later.

 

[finman]

Airlines See Value of Bankruptcy Claims Rise

Last week, a bankruptcy court judge approved the sale of 20% of the $888 million bankruptcy claim held by the Northwest chapter of the Air Line Pilots Association. ALPA said Saturday that it had sold its claim for 85 cents on the dollar, or $150 million in cash.

Just curious about the NWA FA's out there. Did your union make it clear to you the claim process and how you will only be eligible for a claim if there is an agreed upon claim amount as part of a ratified agreement? You'd better hurry up, because if we exit bankruptcy and you still haven't approved an agreement, you'll get nothing.

 

[RobertD]

Just curious about the NWA FA's out there. Did your union make it clear to you the claim process and how you will only be eligible for a claim if there is an agreed upon claim amount as part of a ratified agreement? You'd better hurry up, because if we exit bankruptcy and you still haven't approved an agreement, you'll get nothing.

Just curious Mr. finman, does NW exit plan include you?

 

[finman]

Just curious Mr. finman, does NW exit plan include you?

As far as I know. Not sure what you're implying.

 

[Kev3188]

Just curious about the NWA FA's out there. Did your union make it clear to you the claim process and how you will only be eligible for a claim if there is an agreed upon claim amount as part of a ratified agreement? You'd better hurry up, because if we exit bankruptcy and you still haven't approved an agreement, you'll get nothing.

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