Monday, July 3, 2006
Bankruptcy Judge Allan Gropper has ruled that Northwest Airlines may reject its collective bargaining agreement with the Professional Flight Attendants Association. Section 1113 of the Bankruptcy Code permits a debtor to reject a cba if the rejection is, among other things, "necessary" to the debtor's ability to reoganize. Judge Gropper held that Northwest's dire financial situation satisfied this test. He has stayed the order permitting rejection for fourteen days to give the parties time to attempt a settlement. The case is In re Northwest Airlines Corp., ___ B.R. ___, 2006 WL 1776455 (June 29, 2006) (Westlaw passowrd required).