IAM Seeks $212 Million Claim in NWA Bankruptcy Case

The IAM filed a motion in U.S. bankruptcy court seeking full allowance of $212 million in claims related to the Series C judgment it obtained against Northwest Airlines (NWA) in 2005.

The IAM filed the joint motion with NWA, the International Brotherhood of Teamsters (IBT) and the Association of Flight Attendants (AFA) to allow the Series C judgment claims. The Unions also filed a brief in support of the motion.

Prior to the Northwest’s Chapter 11 bankruptcy filing in 2005, the IAM and IBT won judgments against the airline for breach of contract over its refusal to honor its promise to repay the value of employee concessions in the amounts of $212 million and $65 million, respectively. Those judgments form the basis for the IAM and IBT bankruptcy claims.

If the bankruptcy court grants the IAM’s motion, the claims may be sold by the IAM and IBT trustees. The entire amount recovered through the sale of the claims will be distributed on a pro-rata basis to all eligible current and former Northwest employees. The IAM is not seeking to recoup any of the considerable fees and expenses it incurred in obtaining the Series C judgment in court.