Tuesday, December 5, 2006

PBGC Takes Over Delta Pilots Pension Plan

Deltalogo It looks like the issues surrounding the distress termination on the Delta Pilots Retirement Plan have finally been resolved. 

From WebWire:

Delta Air Lines [yesterday] announced that it has reached a comprehensive settlement agreement that will resolve all issues in connection with the termination of the Delta Pilots Retirement Plan (Pilot Plan) with the Pension Benefit Guaranty Corporation (PBGC), the federal agency charged with insuring the nation’s pension plans under ERISA.

Delta’s Official Committee of Unsecured Creditors also fully supports and has signed the agreement, which has been submitted to the U.S. Bankruptcy Court for approval.

Under the settlement agreement, the PBGC will make a final decision whether to accept the PBGC staff’s recommendation that the Pilot Plan meets the statutory criteria for distress termination. If the agency agrees that the Pilot Plan meets all legal criteria for distress termination, the PBGC will become the Plan’s trustee, establishing a Sept. 2, 2006 termination date for the Plan. In settlement of its claims against Delta and its affiliates, the PBGC will be allowed a pre-petition unsecured claim against Delta of $2.2 billion, and the debtors’ proposed plan of reorganization will provide for the distribution to the PBGC of $225 million in senior unsecured notes.



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