Us Airways Chief Turns Up The Heat

[tug_slug]

When was the last time a judge abrogated a union contract. To the tune of 45% of their pay. I do not think it has happend.....

Doc,
Excellent point! Whats a BK Judge going to do when he see's that it isnt labor's costs that are bringing U down its Managements bad decisions?

 

[700UW]

When was the last time a judge abrogated a union contract. To the tune of 45% of their pay. I do not think it has happend..... again I think you are wrong, but I still have not had time to look into it.

Well if am wrong then the labor bankruptcy attorney Sharon Levine, who handled the TWA, Hawaiian, US Airways and United for the the IAM is the one who you should say is wrong, and I believe she knows more then you or I in the matter, because she is the one who gave me the information.

From Sharon's presentations:
Summer of 2002
Fundamentals of Bankruptcy
Presented by
Sharon L. Levine, Esq. Of Lowenstein Sandler PC

With US Airways in Chapter 11 bankruptcy and an announcement by United Airlines that the second-largest US airline had hired bankruptcy lawyers after the attacks of September 11, many Grievance Committee Chairman, Assistant General Chairman (AGC), Grand Lodge Representatives (GLR) and other union officials were eager to hear an explanation of bankruptcy and how it could affect our futures. For that reason, District 141 M. brought our bankruptcy attorney Sharon Levine of Lowenstein Sandler PC to explain.

Levine started her presentation with an overview of bankruptcy. The main goal of bankruptcy is to relieve a debtor of debts, thereby providing an opportunity for a fresh start. Bankruptcy also benefits creditors by providing a forum for an orderly liquidation of a debtor’s estate or a judicially scrutinized plan for full or partial repayment of creditor, and protecting unsecured creditors from preferential or fraudulent transfers of the debtor’s property and requiring adequate protection of secured creditor’s collateral.

There are two types of filling, Chapter 7, Liquidation and Chapter 11, Reorganization.

Levine continued, explaining the two types, but described Chapter 11 filings in depth. She explained the process and enlightened the attendees on all aspects of a chapter 11 filing. One thing that has stuck out in the US Airways members was a term called Fraudulent Conveyance.

Fraudulent Conveyance: A transfer of the debtor’s property is fraudulent if, made with the actual intent to hinder, delay, or defraud a creditor. (Note that sometimes the debtor’s actual intent maybe inferred circumstantially by certain “badges of fraud.†Alternatively, a debtor receives less than the reasonably equivalent value and was insolvent at the time of the transfer or became insolvent because of it or had “unreasonably small capital†remaining after the transfer for its business operations or intends to incur debts that it will be unable to repay as they mature. Many of the US Airways members asked hard-hitting questions about this as US Airways sold off airplanes and parts for less then fair market value not too long ago.

Our United attendees asked assertive questions in regards to the ESOP stock, numerous assets that United owns, and the ramifications on how they would be affected if United decided to file.

Levine also went over all the procedures and steps in the bankruptcy codes. One item she covered in depth is the 1113 letter, which refers to the section of code that ensures that a company negotiates with the union before they seek abrogation of the labor agreement. When a company seeks protection, the agreement remains in effect. When a union negotiates an 1113 letter it secures an agreement with the company showing that the company will not seek further cuts from labor. To this date, no company that has had an 1113 letter negotiated has ever asked the court to abrogate it.

Companies that request abrogation of the labor agreement but it must meet the following nine (9) distinct requirements:

1. The debtor in possession must have made a proposal to the union.
2. The proposal must be based upon the most complete and reliable information available at the time of the proposal.
3. The modification must be necessary to permit reorganization.
4. The modification must provide that all affected parties be treated fairly and equitably.
5. The debtor must provide the union with such relevant information as is necessary to evaluate the proposal.
6. The debtor must have met with the collective bargaining representative at the reasonable times subsequent to making the proposal.
7. The debtor must have negotiated with the union concerning the proposal in good faith.
8. The union must have refused to accept the proposal with good cause.
9. The balance of the equities must clearly favor rejection of the agreement.

Levine also noted that bankruptcy is not the preferred course for your contract.

Her presentation was excellent and the IAM has someone knowledgeable keep an eye on our interests, and I personally want to thank her for her time.

 

[cavalier]

700...I give you credit for having more patience that I do with posters like spiny here. All he is really doing is preaching his spin on why we must let this management walk all over us trying to makes us believe we have NO choice when in fact we do.

He and a few others are trying to play on the fear and uncertainly employees live with.

Debating him and his kind is like trying to talk a cobra into not biting you, it's unless.

But again, I appreciate your info because it's there for us all to see regardless if spiny here gives it any credence.

My only wish: I wish ALPA would come to their senses and make a stand and live with the outcome whatever it is because this team pushes ten miles when there is an inch movement.

Godspeed to all employees including low level management because GOD knows with this team in place we are all facing dark forces.

 

[mweiss]

700,

You've mentioned the 9 steps to 1113 several times. I'd like to go deeper into that topic.

1. The debtor in possession must have made a proposal to the union.
2. The proposal must be based upon the most complete and reliable information available at the time of the proposal.

These two are easy.

3. The modification must be necessary to permit reorganization.

What constitues "necessary?" It can't simply be that there are no other ways, because pretty much any reorganization can happen more than one way.

4. The modification must provide that all affected parties be treated fairly and equitably.
5. The debtor must provide the union with such relevant information as is necessary to evaluate the proposal.
6. The debtor must have met with the collective bargaining representative at the reasonable times subsequent to making the proposal.
7. The debtor must have negotiated with the union concerning the proposal in good faith.

No real problems here, though "good faith" can be slippery.

8. The union must have refused to accept the proposal with good cause.

Here's a doozy...what constitutes a "good cause?" And what happens if the union refuses but the judge decides it was not a good cause?

 

[SpinDoc]

Also I love the part about the PHL money in the front
door and out the back! AMEN BROTHER!! I hear Uncle
Al is headed that way to clean up dodge city.

Yeah. I heard that Uncle Al could not believe how
many DOT violations PHL had last week (assistance
to handicapped persons) and he is definitely going
to find out what is going on there and make changes
to fix the problems. He had better do something
because US is putting all of their eggs into the PHL
basket and everyone knows how big of a mistake
that has proven to be.

 

[700UW]

mweiss,

A few weeks ago UAL filed an 1114 motion to raise the cost of the retirees medical insurance.

The judge dissallowed the motion and ordered UAL to negotiate with the unions as they did not use good faith.

The judge's reasoning was because UAL never changed their proposal from day one to 60-90 days of negotiating.

The parties sat back down and negoitatied an agreement.

 

[Bear96]

mweiss,

A few weeks ago UAL filed an 1114 motion to raise the cost of the retirees medical insurance.

The judge dissallowed the motion and ordered UAL to negotiate with the unions as they did not use good faith.

You sure about that?

A motion was filed, but I don't think it ever got to the point of the judge "disallowing" it (or filing any other type of opinion or decision-- not sure what you mean by "disallowing"-- parties are free to file whatever motions they want to) because the parties (management and labor) were able to reach a settlement.

Had they not reached an agreement, I would think the judge would have allowed UA to do whatever they wanted. Such is life in Ch.11.

 

[Dog Wonder]

Somewhere, some how good faith has to be defined.

Both the company and the unions need to show it.

It is incredible neither can agree what is good faith.

 

[Dog Wonder]

What is good faith?

 

[mweiss]

Somewhere, some how good faith has to be defined.

It is, through legal precedent. What's difficult about it is that precedent tries to attach a set of actions to the inherently squishy nature of the genuine intent of the words "good faith."

 

[700UW]

You sure about that?

A motion was filed, but I don't think it ever got to the point of the judge "disallowing" it (or filing any other type of opinion or decision-- not sure what you mean by "disallowing"-- parties are free to file whatever motions they want to) because the parties (management and labor) were able to reach a settlement.

Had they not reached an agreement, I would think the judge would have allowed UA to do whatever they wanted. Such is life in Ch.11.

Yes I am sure, it was told to us by AGC Bill Carman of 141 for the IAM.

 

[Dog Wonder]

How many of you are willing to bet their futures on this one?

 

[USA320Pilot]

During the last bankruptcy, the Judge Mitchell approved virtually every company motion. Is there any reason to believe this would not occur again?

Moreover, I understand that if the viability of the corporation is at stake, a bankruptcy judge will almost always side with the debtor and the creditors committee if a S.1113/S.1114 motion is filed. If true, the company could seek to outcource virtually all of the union positions.

Apparently the AFA and CWA understand the importance of the issues, since the company may not fund the F/A and IAM pensions in September, according to PIT AFA LEC Rep Teddy Xidas. It appears that is why the AFA will begin negotiations with the company on Tuesday.

Respectfully,

USA320Pilot

 

[Smartest Loser]

During the last bankruptcy, the Judge Mitchell approved virtually every company motion.

Exactly, anyone that has been in a court room knows it can’t go your way all the time…!!

The unions have a much better case this time than last in making arguments about keeping their contracts.

SL

 

[LiveInAHotel]

The flight attendants better not give anymore up! If they do then they should think about working HERE, because they will have a bigger net paycheck to take home.