Washington, D.C., April 20, 2007 - The International Association of Machinists and Aerospace Workers (IAM) today 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. NWA employees received a promise of repayment in exchange for concessions between 1993 and 1996.
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.
“Loyal, hard-working Northwest employees have waited more than a decade for repayment of the difficult sacrifices they made to keep the airline out of bankruptcy in 1993,” said IAM General Vice President Robert Roach, Jr. “It is high time for those employees to be repaid now.”
The U.S. Bankruptcy Court at One Bowling Green, N.Y., N.Y., Rm 617, will hold a public hearing on the motion to pay Series C judgment claims on May 2, 2007 at 11:00 a.m. “I encourage any interested NWA employees to attend the court hearing to show support for the Series C claims,” said District Lodge 143 President Steve Gordon.
Well-heeled New York bond traders may object to allow the Series C claims because the profits they stand to make off of their Northwest trades will be a few cents less. “By their presence in the courtroom, NWA employees will show the judge and the bond holders that they will not stand for such unconscionable greed,” said Gordon.
Any objection to allowing the Series C claims must be filed by April 27. “The IAM will inform Northwest employees of the identity of anyone who seeks to deprive employees of their repayment right,” said President Gordon.
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.
