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Fri, Jun 17, 2005

Bankruptcy Court Approves US Air's Golden Parachutes

Unions Still Bitter After Workers' Pay Cut, Pensions Dropped

A federal bankruptcy judge says US Airways can fill the pockets of its executives to keep them from leaving ahead of the company's merger with America West.

Although he approved the plan, Federal Judge Stephen Miller was skeptical. In his 15-page ruling from the bench in Northern Virginia Thursday, he wrote, "Retention plans have something of a shady reputation. They've been used to reward teh very executievs whose bad decisions or lack of foresight" bankrupt companies in the first place.

The judge's ruling was quoted by the Charlotte Observer.

But Mitchell acknowledged US Air "seems to be experiencing a serious exodus of management employees that threatens its ability to reorganize and calls for immediate action."

Mitchell didn't approve the whole proposal. Perhaps as a nod to union members bitter over the parachute plan... Judge Mitchell held off on the vastly boosting the pay of the airlines top 25 executives -- including CEO Bruce Lakefield. That decision should come later this year.

FMI: www.usairways.com

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