Delta to Give Cash to Employees

[Pat Fabin]

The general is basically correct, the payouts from the 2.1b claim and the 650m note will far surpass anything given directly to the employees. AND, as pointed out earlier, we have a "me too" clause (hate that term), that allows us to tag along to any broad-based pay increase or cash bonuses given to other employee groups.

It is good to see the other employees get something though. We negotiated what we have, but most of the other employees don't make very much and have worked hard in very uncertain times. Its amazing that so many people stuck with this crazy company.

Hopefully brighter times are ahead!

 

[007]

I can't wait to see what they come up with next so they don't have to pay that note......

 

[Wiskey Driver]

I can't wait to see what they come up with next so they don't have to pay that note......

That was my thinking when I asked the original question.

WD.

 

[HomerJ]

How many Billions did DL lose before BK?

 

[FDJ2]

That was my thinking when I asked the original question.

WD.

The "note" and the "claim" are two different animals. The claim floats on the market and its value may vary depending on who buys it and when, apparently it sold and is selling at better than expected rates. Most pilots have already pre sold their claim and whatever financial institution bought it, pays out on that claim once we exit BK. That money then get's distributed to the pilots in our 401k up to the IRS 415 limit for both 2006 and 2007 immediately upon bk exit, 44k and 45k respectively. Any remaining funds are distributed as cash with applicable tax deductions.

The "note" has a guaranteed value, $650M. It is issued within 120 days of bk exit and is converted to cash thereafter. The cash from the note must equal $650M and it is then distributed within 6 to 12 months of bk exit, once again into the 401k up to the IRS 415 limit. The note will most likely be distributed in early 2008, in order to maximize the tax benefit.

Both the note and the claim are part of DAL's court approved POR and they are binding on the company and any successor.

Once the claim and the note are distributed the company is still on the hook for a 9% defined contribution and 2% 401k contribution (not match), since the IRS 415 limit will be met for all DAL pilots on the seniority list as of June 1 2006, for tax years 2006 and 2007 and most likely 2008, each pilot will receive the 9% DC and 2% 401K money as ordinary income. Effectively an 11% pay raise on top of our contractually agreed upon pay raises and any profit sharing or performance pay outs.

DAL is on track to exit BK in less than 2 months. The company has stated that it is ahead of it POR at this time and actually posted an operational profit for the full year 2006. Confirmation hearings are scheduled for April 25th.

 

[General Lee]

The "note" and the "claim" are two different animals. The claim floats on the market and its value may vary depending on who buys it and when, apparently it sold and is selling at better than expected rates. Most pilots have already pre sold their claim and whatever financial institution bought it, pays out on that claim once we exit BK. That money then get's distributed to the pilots in our 401k up to the IRS 415 limit for both 2006 and 2007 immediately upon bk exit, 44k and 45k respectively. Any remaining funds are distributed as cash with applicable tax deductions.

The "note" has a guaranteed value, $650M. It is issued within 120 days of bk exit and is converted to cash thereafter. The cash from the note must equal $650M and it is then distributed within 6 to 12 months of bk exit, once again into the 401k up to the IRS 415 limit. The note will most likely be distributed in early 2008, in order to maximize the tax benefit.

Both the note and the claim are part of DAL's court approved POR and they are binding on the company and any successor.

Once the claim and the note are distributed the company is still on the hook for a 9% defined contribution and 2% 401k contribution (not match), since the IRS 415 limit will be met for all DAL pilots on the seniority list as of June 1 2006, for tax years 2006 and 2007 and most likely 2008, each pilot will receive the 9% DC and 2% 401K money as ordinary income. Effectively an 11% pay raise on top of our contractually agreed upon pay raises and any profit sharing or performance pay outs.

DAL is on track to exit BK in less than 2 months. The company has stated that it is ahead of it POR at this time and actually posted an operational profit for the full year 2006. Confirmation hearings are scheduled for April 25th.

Don't talk logically to WD, he doesn't understand it.

Bye Bye--General Lee

 

[retired guy]

BTW..the money that is to be given to the non-contract people is the same money that my former employers screw me and the rest of the retired pilots out of. (Sorry to end a sentence with a preposition.)

 

[Heavy Set]

BTW..the money that is to be given to the non-contract people is the same money that my former employers screw me and the rest of the retired pilots out of. (Sorry to end a sentence with a preposition.)

Did you have to go? You could have stayed and gambled, and maybe gone to age 65 if it happens. What about the guys that didn't have the choice you had, like the 49 year olds? It was your choice.

 

[dtfl]

Not necessarily true. Pilots will participate in any profit sharing, and we have a "me too" clause in our contract which covers any broad employee pay increases. We have minimum pay rate increases also in our PWA, however if the company continues to track along as described in its disclosure statement, could be more substantial than the contractually agreed to increases. Additionally, pilots participate in any monthly performance bonuses.

I believe there might be a small cash pay out to the employees once we exit BK, but it will hardly match the pilots $2.1B claim.

Interesting how the releases I have read are worded so it seems only the salaried folks (ie non contract) are getting the pay raises.

 

[BILL LUMBERG]

Hey FDJ and GL,

Where exactly is the me-too clause written in the PWA......I know it's urban legend but I can't find the exact language......Is it in our stellar attempt at a recovery compact??

Thanks