Fri, Jan 06, 2006
Execs Focus On Pension Battle As Creditors Wait
Delta Air Lines has
been granted a six-month extension on the deadline to file a
reorganization plan to lift the company from Chapter 11 bankruptcy
protection.
Judge Prudence Carter Beatty ruled Thursday airline executives
can have until July 11 to submit their plan to reorganize the
airline. Originally, the airline was supposed to have their plan
ready by January 12.
Company creditors will also have to wait to file their plans,
until airline executives file theirs.
While the move gives Delta some additional breathing room in the
airline's quest to emerge from bankruptcy, in reality it does
little more than allow Delta executives an opportunity to focus on
a more urgent task: ongoing legal battles over its handling of
retiree's pensions.
According to the Associated Press, Delta retirees are looking to
overturn Delta's definitions of "qualified" versus "nonqualified"
payments into the company's pension funds. Delta maintains the
majority of its payments were "nonqualified," meaning they were not
protected under federal law. Retirees, understandably, maintain the
payments were qualified, and need to be paid out unless Delta
wishes to violate the law.
The Air Line Pilot's
Association has gone to bat for the retirees, claiming the carrier
missed paying $145 million in qualified contributions to the
pension fund on October 15, as well as roughly $7 million per month
in nonqualified contributions.
Delta has stated the company is working to salvage its pension
plan, but officials aren't sure if that's possible.
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