This is the internet, and some will read this and need a definition.
What is Corporate Bankruptcy
There are two primary types of bankruptcy for corporations: "Chapter 7" liquidation and "Chapter 11" reorganization. The names refer to sections of the Federal Bankruptcy Code.
If a business chooses Chapter 7 bankruptcy, or is involuntarily placed in it, all the company's assets are sold, and the proceeds are used to pay creditors in a priority also defined by law. Filing Chapter 7 results in the company being dissolved.
Under Chapter 11, the company presents a reorganization plan and is not dissolved. Such a plan also may be filed by the company's creditors or other interested parties, and the company may be forced into involuntary bankruptcy under Chapter 11. The plan includes a timetable for repayment to creditors. During the reorganization time, the company is allowed to continue to operate. The amount of debt that the company is required to pay off is based on the value of the business at the time of filing, the business's ability to pay, and the willingness of creditors to accept delayed payment with the expectation that the company will return to being profitable.
Bankruptcy Code Sections
There are three motions the Company can file with the court that could affect our work lives. These are an 1113 motion; 1113 E motion and 1114 motion; each referring to a different section of the Bankruptcy Code. You will be notified if any of these motions are filed with the court and the affects it will have on you.- An 1113 motion if/when it is filed by the Company would ask the judge to reject or "throw out" our agreement. If the Company files such a motion, good faith negotiations MUST take place. If we reach an agreement with the Company, it will be sent to you for a vote. If we do not reach an agreement, the judge will then hold a hearing. Attorneys for the Company and the Union would present arguments and evidence on whether the Company's proposed changes are "necessary" to a successful reorganization, and whether they are "fair and equitable" to all parties. If the Court finds that the changes are necessary, and that they are fair and equitable, the judge would grant the Company's 1113 motion, and reject our collective bargaining agreement. Keep in mind the judge will not work out a contract for us to work under; he simply decides whether the Company's motion to reject our entire contract should be granted. If we get to that point, the Company will most likely, but not definitely, impose its last best offer from the 1113 negotiations. And, under this scenario, there would be no opportunity for a ratification vote. In the meantime, we are still negotiating with management outside of any formal motions.
- An 1113 E motion would be filed by the Company if they need immediate relief in some part of the labor agreements. Section 1113 E permits such emergency relief on an interim basis if the Company can show that it is "essential." Most likely, if an 1113 E motion were filed the Company would seek to immediately reduce wages or other immediate cash costs. AS OF THIS WRITING THE COMPANY HAS NOT FILED AN 1113 E MOTION.
- An 1114 motion relates to retiree medical benefits only. Like 1113, Section 1114 lays out a process of negotiations followed by a court hearing if negotiations fail to yield an agreement on proposed changes. If the Company files an 1114 motion, a procedure has been put in place by the court to establish a committee to represent the retirees' interests. The committee would have its own attorneys and professional advisors paid for out of the assets of the Company. The law recognized the union as a proper representative of the retirees, but also allows the retirees to be represented independently of the union, with representation on the retiree committee. By Oct. 4 we will determine the best way to represent the retirees in this procedure.
Now back to the regularly scheduled thread that has been de-railed.
Just throwing out TWA's collective bargaining contract, they still would have had Carl Icahn on their back for .50 c/US D on every ticket sold.
I'm sure you'll tell how wrong I am.
Aircal was a viable Company. Reno Air was a viable company. Ozark was a viable company. TWA was not.
I think ALPA recognized that. And it sounds like it went down as, Don Carty said accept this deal or good luck. I think ALPA knew it would end badly if TWA tried to make another BK filing work.
TWA was a great airline. All of the TWA pilots I've met are great. AA is slowly using some of the procedures that are beneficial and great ideas.
I honestly think that if NWA was on the brink, I mean ready to file BK and possibly chapter 7, that the SLI would have gone differently.
And to the gentleman that flowed back to Eagle, I was wrong to say you should thank ALPA and APA. I shouldn't have wrote that. My intention was to accentuate that nothing is free and all things like that insurance policy was negotiated.
I like what nowake wrote, very thoughtful.
Happy Holidays
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