DL took their shot at the 1113C process early in their BK. Not that they couldn't possibly take another shot at it, but how many times has a BK judge overturned his earlier ruling?
Jim
Jim is there a loophole
summary of the DL ALPA T/A:
Bankruptcy Protection Covenant, ALPA Claim, and Notes
• The Bankruptcy Protection Covenant is an extensive legal document that
supersedes the LOA #46 Bankruptcy Protection Letter.
•
The company cannot file another Section 1113 motion to reject the PWA during
this bankruptcy unless in imminent danger of losing its DIP financing and
satisfaction of other tests.• Legal protections for ALPA and its representatives.
• The company must propose and may only support a Plan of Reorganization
(POR) that contains the ALPA Notes, the ALPA Claim (equity), and other terms,
including assumption of the PWA as modified.
• If the company's POR does not comply with the ALPA terms, procedures are
established to return to the PWA in its entirety as it existed prior to LOA #50.
• $650 million note or cash (at company option) in consideration of contract
concessions if the DB plan terminates. MEC to determine allocation.
• $2.1 billion bankruptcy claim in consideration of contract concessions. In a
bankruptcy, a claim is usually paid in equity (stock in the reorganized company
when it exits bankruptcy). The value of equity resulting from a claim will depend
on the value of the company at exit from bankruptcy and the size of the total
claim pool. The value of the stock is usually much less than the nominal value of
the claim itself. For example, in the United Airlines bankruptcy, at the time of
exit from bankruptcy, the newly-issued United stock traded at about 24% of the
nominal value of the claim; today the stock is trading at about 16% of the nominal
value of the claim.
• The MEC may be able to decide that the notes, cash and equity described above
may be allocated to qualified retirement plans, up to Section 415© limits.
Recovery Compact
• Process established to repair and improve employee-management relations.
Delta’s Section 1113 © demands that were not achieved
• 19.5% pay cut with no pay raises
• Delete 401 (k) company contribution
• Five year duration
• Delete all furlough protections
• No financial returns
• $325 million concessions per year and no recognition of DB Plan termination
• 79-seat jet DCI aircraft
• Delete the change of control provisions
• Establish a sick leave reliability program and impose draconian sick leave terms
• Minutes under offset by minutes over
• 15 minute release per duty period
• No captain on relief crew for flights over 12 hours
• Change max scheduled duty time