Delta, PBGC Reach Agreement on Delta Pilot Pension Plan
Monday December 4, 2:18 pm ET
ATLANTA, Dec. 4, 2006 (PRIME NEWSWIRE) -- Delta Air Lines today announced that it has reached a comprehensive settlement agreement that will resolve all issues in connection with the termination of the Delta Pilots Retirement Plan (Pilot Plan) with the Pension Benefit Guaranty Corporation (PBGC), the federal agency charged with insuring the nation's pension plans under ERISA.
Delta's Official Committee of Unsecured Creditors also fully supports and has signed the agreement, which has been submitted to the U.S. Bankruptcy Court for approval.
``We are pleased we were able to work with the PBGC and our Creditors' Committee constructively to reach this very important and complex agreement. It represents another important milestone in Delta's restructuring,'' said Edward H. Bastian, Delta's chief financial officer.
Under the settlement agreement, the PBGC will make a final decision whether to accept the PBGC staff's recommendation that the Pilot Plan meets the statutory criteria for distress termination. If the agency agrees that the Pilot Plan meets all legal criteria for distress termination, the PBGC will become the Plan's trustee, establishing a Sept. 2, 2006 termination date for the Plan. In settlement of its claims against Delta and its affiliates, the PBGC will be allowed a pre-petition unsecured claim against Delta of $2.2 billion, and the debtors' proposed plan of reorganization will provide for the distribution to the PBGC of $225 million in senior unsecured notes.
The Bankruptcy Court previously determined that Delta could not reorganize or emerge from Chapter 11 unless the Pilot Plan was terminated.
As previously announced, retired Delta pilots will receive in excess of $800 million in allowed claims in respect of their lost non-qualified pension benefits. Delta's active pilots are now covered by a defined contribution pension plan previously negotiated with the Air Line Pilots Association, the union representing Delta's more than 6,000 active pilots. Delta again reconfirmed in the agreement that it will preserve the Delta Retirement Plan, which covers ground employees and flight attendants. The ability to preserve this plan was made possible by the alternative funding provisions included in the pension reform legislation passed by Congress last August.
Monday December 4, 2:18 pm ET
ATLANTA, Dec. 4, 2006 (PRIME NEWSWIRE) -- Delta Air Lines today announced that it has reached a comprehensive settlement agreement that will resolve all issues in connection with the termination of the Delta Pilots Retirement Plan (Pilot Plan) with the Pension Benefit Guaranty Corporation (PBGC), the federal agency charged with insuring the nation's pension plans under ERISA.
Delta's Official Committee of Unsecured Creditors also fully supports and has signed the agreement, which has been submitted to the U.S. Bankruptcy Court for approval.
``We are pleased we were able to work with the PBGC and our Creditors' Committee constructively to reach this very important and complex agreement. It represents another important milestone in Delta's restructuring,'' said Edward H. Bastian, Delta's chief financial officer.
Under the settlement agreement, the PBGC will make a final decision whether to accept the PBGC staff's recommendation that the Pilot Plan meets the statutory criteria for distress termination. If the agency agrees that the Pilot Plan meets all legal criteria for distress termination, the PBGC will become the Plan's trustee, establishing a Sept. 2, 2006 termination date for the Plan. In settlement of its claims against Delta and its affiliates, the PBGC will be allowed a pre-petition unsecured claim against Delta of $2.2 billion, and the debtors' proposed plan of reorganization will provide for the distribution to the PBGC of $225 million in senior unsecured notes.
The Bankruptcy Court previously determined that Delta could not reorganize or emerge from Chapter 11 unless the Pilot Plan was terminated.
As previously announced, retired Delta pilots will receive in excess of $800 million in allowed claims in respect of their lost non-qualified pension benefits. Delta's active pilots are now covered by a defined contribution pension plan previously negotiated with the Air Line Pilots Association, the union representing Delta's more than 6,000 active pilots. Delta again reconfirmed in the agreement that it will preserve the Delta Retirement Plan, which covers ground employees and flight attendants. The ability to preserve this plan was made possible by the alternative funding provisions included in the pension reform legislation passed by Congress last August.
