United Airlines: bankruptcy.

Publication: Corporate Counsel

Publication Date: 01-APR-05

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United Airlines, Inc., pilots might fly the friendly skies, but a federal bankruptcy judge has ordered them not to steer the airline's Chapter 11 negotiations. On January 7 Judge Eugene Wedoff rejected the airline's agreement with its pilots union, saying that it gave the pilots unfair leverage over the bankruptcy process. Most strikingly, the discredited agreement allowed the airline to end pension payments to the pilots only if it stopped paying pension benefits to members of all its other unions. United Airlines needs another $8.3 billion to pay its pension obligations, including $2.9 billion for pilots. In addition to terminating its employee pension plans, the company says funders will not give it enough money to exit bankruptcy unless it shaves another $725 million from labor expenses. The...

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