Execs Focus On Pension Battle As Creditors Wait

Delta Air Lines has been granted a six-month extension on the deadline to file a reorganization plan to lift the company from Chapter 11 bankruptcy protection.

Judge Prudence Carter Beatty ruled Thursday airline executives can have until July 11 to submit their plan to reorganize the airline. Originally, the airline was supposed to have their plan ready by January 12.

Company creditors will also have to wait to file their plans, until airline executives file theirs.

While the move gives Delta some additional breathing room in the airline's quest to emerge from bankruptcy, in reality it does little more than allow Delta executives an opportunity to focus on a more urgent task: ongoing legal battles over its handling of retiree's pensions.

According to the Associated Press, Delta retirees are looking to overturn Delta's definitions of "qualified" versus "nonqualified" payments into the company's pension funds. Delta maintains the majority of its payments were "nonqualified," meaning they were not protected under federal law. Retirees, understandably, maintain the payments were qualified, and need to be paid out unless Delta wishes to violate the law.

The Air Line Pilot's Association has gone to bat for the retirees, claiming the carrier missed paying $145 million in qualified contributions to the pension fund on October 15, as well as roughly $7 million per month in nonqualified contributions.

Delta has stated the company is working to salvage its pension plan, but officials aren't sure if that's possible.

FMI: www.delta.com, www.alpa.org