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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 Employee Service
Center: 1-800-MY DELTA. Delta’s online Retiree Connection: http://www.dlretiree.info/index.htm,
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.
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