Retired Pilots Claim Delta Air Lines Owes Them $100 Million
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published August 20, 2007
Brooke Heath
The claims were filed against the international airline on behalf of about 1,000 retired Delta Air Lines pilots who retired from Delta between 2000 and 2005 and were participants in Delta's defined-benefit pension plan.
The former pilots filed with the U.S. Bankruptcy Court for the Southern District of New York, asking that Judge Adlai S. Hardin, Jr., order Delta Air Lines to pay the pilots from a reserve fund that was established by the airline to pay creditors, according to Law.com.
Back in April, the terms of Delta's bankruptcy deal required that the airline pay the retired pilots an estimated $0.65 and $0.85 on every dollar owed by their supplemental retirement plan and for a qualified plan, according to G. Dean Booth, of Miller & Martin, who, along with Shelley D. Rucker, represents the pilots.
According to Law.com, the pilots say Delta neglected to pay them the benefits because the company is misinterpreting federal tax law. Law.com also quotes the filing, stating that "the pilots 'are not being allowed a claim for their full retirement benefits...because a portion of those benefits are being disregarded by Delta through Delta's inconsistent application of the compensation and benefit limitations specified under Internal Revenue Code §§401(a)(17) (the "Compensation Cap") and 415(b) (the "Benefit Cap").'"
Previously, the pilots had discussed their anger regarding how Delta was calculating the amount of money that each individual was owed by the airline with Delta executives. At the time, the airline and pilots agreed that they would postpone submitting the claim to the U.S. Bankruptcy Court until after the airline had finished its bankruptcy reorganization, according to Booth.
Booth also said that the total of $100 million is just an estimate of what Delta owes the pilots because Delta never made its payroll data public.
"We don't think Delta is cheating us," said Booth. "We disagree with [their] methodology [for calculating the amount they owe in benefits]."
Delta feels that the claims made against it are of no value. According to Delta Air Lines spokeswoman Lisa Gagnon, "Delta has reviewed the claim and believes it has no merit."
An initial hearing is scheduled to take place at the U.S. Bankruptcy Courthouse in White Plains, New York, on October 2.
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