Notice of
Dissolution of Retired Pilot 1114 Committee and Further
Information for Use by Committee Constituents
I. Dissolution of the
Committee
In accordance with the Bankruptcy
Code and Delta’s confirmed Plan of Reorganization, the Delta
Retired Pilot Section 1114 Committee was dissolved on the
Effective Date of Delta’s Plan, Monday, April 30, 2007.
II. Sources of Information
After the Committee’s Dissolution.
Delta has agreed to underwrite the
cost of keeping the Committee’s website online through July, 2007,
as a historical resource, but the site will not be regularly
updated and no email will be active at the website during that
time. If questions arise, we believe the following contact
information may be helpful to the Committee’s constituents:
Delta’s bankruptcy services agent,
BSI: 310-838-8020 or 866-686-8702
Delta’s reorganization counsel, Davis
Polk & Wardwell: (212) 450-4000
Marsh & McLennan (alternative DALRC
plan for those over age 65): 1-800-923-4461
IRS Health Coverage Tax Credit (“HCTC”)
Consumer Contact Center: 1-866-628-4282
The following websites may also have
some helpful information, although the Committee does not know how
long they will be maintained:
The Delta Pilots Pension
Preservation Organization, Inc, (“DP3”),
www.dp3.org
The Delta Air Lines
Retirement Committee (“DALRC”),
www.dalrc.org
The Delta Non-Pilot 1114 Committee,
www.delta1114.org
III. Summary and Copies of Committee Agreements.
The Committee has negotiated several
agreements during the bankruptcy which continue to affect its
constituents. Delta has honored these agreements and we fully
expect it will continue to do so as long as the agreements remain
in effect. However, since Committee constituents are treated
differently under these agreements than active pilots or later
retirees, it is possible that there may be some confusion in the
future application of the agreements by Delta’s representatives.
We anticipate that any confusion can easily be resolved by
reference to these agreements. To assist its constituents in case
there is any confusion, the Committee has put together the
following suggestions on how to proceed. Copies of the agreements
and some related documents you may need are gathered together
here:
(1) Stipulation and Consent Order
Under Bankruptcy Rule 9019 Between Delta Air Lines, Inc., and the
Section 1114 Pilot Retiree Committee, entered by the
Bankruptcy Court on May 31, 2006 (the “Stipulation and Consent
Order ”). Related documents:
(a) Letter
of Agreement 51 (“LOA 51 ”) between The Air Line Pilots
Association (“ALPA”) and Delta
(b) Delta’s
motion for authority to enter into LOA 51 (the “LOA 51 Motion ”)
(c) Letter
from Committee counsel to Delta concerning incorporation in D&S
Plan of Committee exception to LOA 51
changes (the “D&S Plan Letter ”)
(2) Section 1114 Pilot
Retiree Committee Agreement Term Sheet dated October 4, 2006(the “First Term Sheet”). Related document:
(a) Order dated
October 19, 2006, approving the First Term Sheet .
(3) Supplemental Section
1114 Pilot Retiree Committee Agreement Term Sheet dated
January 22, 2007(the “Supplemental Term Sheet ”). Related
documents:
(a) Amendment
to Supplemental Section 1114 Pilot Retiree Committee Agreement
Term Sheet (“Supplemental Term Sheet Amendment ”).
(b) Order dated
February 22, 2007 , approving the Supplemental Term Sheet and the
Supplemental Term Sheet Amendment.
(4) Order Confirming Delta's Plan
of Reorganization dated April 25, 2007 (the " Confirmation
Order , without exhibits. (Most of the exhibits do not relate to
the Retired Pilots.)
(5) Final Plan of Reorganization
as confirmed by the Court (the" Plan"), which is attached to the
Confirmation Order as Exhibit "A."
IV. The LOA 51 Issues
Delta and the Air Line Pilots
Association (“ALPA”) negotiated certain wide-ranging changes to
pension, disability, and other benefits provided for in the Pilot
Working Agreement. The result of that negotiation was embodied in
LOA 51 . The Committee had not been formed when those negotiations
began and it did not have an opportunity to participate. The
Stipulation and Consent
Order
provides that certain provisions of
LOA 51
, generally those dealing with issues covered by Bankruptcy Code
Section 1114, would not be effective as to the Committee’s
constituents in the absence of further Court order or agreement by
the Committee. (Except for the
First Term Sheet
, there was no such further order or agreement.)
The LOA 51 changes which do not
apply to the Committee’s constituents are described and defined as
the “1114 Provisions” in paragraph 26 of
Delta’s LOA 51 Motion
as follows:
The provisions contained in LOA #51
modifying Section 25 of the PWA (Medical Benefits) and certain
provisions modifying Section 26 of the PWA (Retirement and
Disability Benefits) on their face address benefits that, as to
retirees, are the types of health, life insurance and disability
benefits within the ambit of section 1114 of the Bankruptcy Code.
As to pilots who retired on or before the June 1, 2006 effective
date of LOA #51, Delta is of course aware of its obligations under
section 1114, and therefore expressly agreed with ALPA that none
of the 1114 Provisions shall become effective as to pilots who
retired on or before June 1, 2006 without either an order of the
Court under section 1114 of the Bankruptcy Code or the agreement
of the Official Section 1114 Committee of Pilot Retirees.
In addition, paragraphs 6 through 8
of the Stipulation and Consent Order agree that the parties will
leave undecided the question of whether LOA 51 improperly modified
”retiree benefits” by allowing Delta to use $60 Million per year
from the Delta Pilots Disability & Survivorship Trust to pay sick
leave and other legally permissible benefits. That issue has not
been raised further, and Delta ultimately made no additional
proposal for changes to the D&S Plan.
LOA 51 is too lengthy to quote here.
However, as an example, changes made by
LOA 51
to the procedure for establishing long-term disability are not
effective as to the Committee’s constituents. The long-term
disability procedures for Committee constituents are still
governed by the PWA and its pre-bankruptcy amendments, without
the
LOA 51
changes.
Important Note:
The PWA has recently been completely rewritten as of June 1, 2006,
and incorporates the amendments made by LOA 51 , but it does
not mention Delta’s agreement that the
LOA 51
changes do not apply to Committee constituents. However, Delta has
expressly agreed, and the Bankruptcy Court has found at page 12,
paragraph 32 of the
Confirmation Order
, that the terms and conditions of the
Stipulation and Consent Order
apply to any amendment to the PWA that became effective during the
bankruptcy case. This language is quoted below in Section V(2) of
this notice.
V. Suggestions On How to
Proceed If Questions Arise
(1) Establish that you are
covered under the Committee’s agreements. The First Term Sheet
at page 1, section I(B), contains the following detailed
description of who the Committee’s constituents are:
Pursuant to the May 31, 2006
Stipulation and Consent Order Under Bankruptcy Rule 9019 Between
Delta Air Lines, Inc. and the Pilot Retiree Committee (“Stipulation”),
persons represented by the Section 1114 Pilot Retiree Committee (“1114
Pilot Committee”) include: (a) pilots who retired from Delta
on or before June 1, 2006 (or from Western Airlines, Inc., prior
to its April 1, 1987 merger with Delta); (b) pilots employed, or
formerly employed, by Delta who on June 1, 2006 will be age 60 or
over, not on the Delta pilots’ system seniority list, and eligible
for Delta health and welfare benefits; and (c) survivors (as
defined below in (I)(E)) who are entitled to health and welfare
benefits from Delta through decedents who met the conditions set
forth in clauses (a) or (b). Survivors, as set forth in paragraph
(c) of the Stipulation, include individuals who are entitled to
health and welfare benefits from Delta through decedents who (1)
died while actively working or on disability prior to age 60 and
(2) would have met the conditions set forth in clause (b) of the
Stipulation had they lived.
Please note that “Survivor” is
defined at paragraph I(E), for purposes of the First Term Sheet ,
as “a spouse of a deceased Retired Pilot who received monthly
survivor income benefits from the Delta Pilots Disability and
Survivorship Plan following the Retired Pilot’s death.” In
addition, the
First Term Sheet
applies to persons represented by the 1114 Pilot Committee, other
than those pilots who retired from Western Airlines, Inc, prior to
its April 1, 1987 merger with Delta, because healthcare coverage
for those Western retirees was not changed by the
First Term Sheet
.
(2) Establish what kind of
question you have and identify the documents you need.
Remember that the Section 1114 Committee’s agreements by statute
deal only with retiree health and welfare benefits, and do not
deal with pension issues. Generally speaking, the following
documents will address the following situations:
(a) If you have a
question about the calculation of premiums for your healthcare
coverage, the agreement is contained in the First Term Sheet .
(b) If you have a
question about the calculation of a claim for lost medical
benefits, the agreement is contained in the Supplemental Term
Sheet and the
Supplemental Term Sheet
Amendment
.
(c) If you have a
question about whether Delta or its agents are incorrectly
applying the LOA 51 changes to you, the agreement is contained in
the
Stipulation and Consent
Order
, beginning on page 2, as follows:
2.…[N]one of the 1114 Provisions (as
defined in the [LOA 51] Motion ) shall become effective as to
those persons represented by the Pilot Retiree Committee (the
“Retired Pilots”) without either an order of the Court under
section 1114 of the Bankruptcy Code or the agreement of the Pilot
Retiree Committee.
You may also need to refer to the
following language in the Confirmation Order at page 12, paragraph
32, to establish the applicability of the Stipulation and Consent
Order :
32. Continuation of Retiree
Benefits (11 U.S.C. §1129(a)(13)). Section 1129(a)(13) of the
Bankruptcy Code requires a plan to provide for retiree benefits at
levels established pursuant to section1114 of the Bankruptcy Code.
On and after the Effective Date, pursuant to section 1129(a)(13)
of the Bankruptcy Code, Reorganized Delta shall continue to pay
those retiree health and welfare benefits of the Debtors
specifically addressed by and as set forth in the Retiree Term
Sheets at the level and for the duration of the period for which
Delta has obligated itself to provide such benefits. Solely to the
extent provided therein, the terms and conditions of the
Stipulation and Consent Order under Bankruptcy Rule 9019 between
Delta Air Lines, Inc., and the Section 1114 Pilot Committee dated
May 31, 2006, shall apply to any amendment to the Pilot Working
Agreement, including, without limitation, Letter of Agreement #51,
that became effective during the Chapter 11 Cases and prior to the
Effective Date. Except as expressly set forth in the Retiree Term
Sheets, the Reorganized Debtors may unilaterally modify or
terminate any retiree benefits (including health and welfare
benefits) in accordance with the terms of the plan, program,
policy or document under which such benefits are established or
maintained; provided, however, that nothing herein shall be
construed to enlarge the Reorganized Debtors’ rights to modify
such retiree benefits (including such retiree benefits that are
vested, if any) under applicable non-bankruptcy law.
(3) Be patient. It may
take some time for everyone to reach the same understanding. If
you are talking to someone who is fairly new at their job, you may
need to ask to speak with a more senior person who has knowledge
of what went on during the bankruptcy. Throughout the bankruptcy,
Delta has frequently demonstrated its good faith in dealing with
retirees, and when it made errors it promptly corrected them. We
do not anticipate any change in Delta’s attitude.
(4) Consult a professional if you need one. There is
no question that these matters can become complicated. If you
cannot resolve your problem with Delta or its agents, we strongly
suggest you consult with an attorney (or other professional, as
necessary) to get some independent advice on your situation.
