Delta and Pilots Taking Pension Issue to Court
Posted on: Monday, 17 October 2005, 15:00 CDT
ATLANTA -- Delta Air Lines Inc. and its pilots are about to battle in court over a key issue in the carrier's bankruptcy case -- pensions.
The pilots want the nation's third-largest carrier to continue making minimum contributions to their pension plan and certain payments to higher-paid retirees, while the Atlanta-based company vows it won't do either unless a judge forces its hand.
Lawyers for both sides will argue the issue at a bankruptcy court hearing in New York on today in a dispute that comes as many observers wonder whether Delta will terminate its pension plan altogether if it doesn't get relief from Congress.
"Anybody that is not worried would have to be a very cold- blooded person," said Dean Booth, a lawyer for the pilots.
The pilots argue their contract with Delta requires the airline to continue making the pension payments in question until it applies for and gets permission from the bankruptcy court to void the contract, which it has not done.
The company argues that the payments are unsecured, pre-petition claims against the airline and, therefore, Delta does not have to make the payments a priority during its reorganization.
Source: Deseret News (Salt Lake City)
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