Reply #8: Firm: United owes $994M to pensions [View All]

[UpInArms]

http://www.newsday.com/business/ny-bzair014060775dec01,0,4449330.story?coll=ny-business-headlines

A Washington, D.C.-based pension consulting firm appointed by bankrupt United Airlines in September said in a court filing yesterday that the airline must pay $994 million in skipped contributions to employee pension plans and in benefits accrued by the plans.

Chicago-based United's decision several months ago to skip pension contributions as long as the airline remains in bankruptcy sparked a furor among unions and some in Congress, who charged the carrier was reneging on promises to workers.

The motion filed in U.S. Bankruptcy Court by Independent Fiduciary Services Inc. was an apparent victory for United pension holders. Independent Fiduciary oversees plans for flight attendants, mechanics and bag handlers, about 107,000 people.

Independent Fiduciary's motion will go before Judge Eugene R. Wedoff, who is overseeing United's bankruptcy case. Wedoff will rule on Independent's assertion the pension funding contributions are entitled to so-called "administrative priority status." United said it disagrees with Independent's findings.

But conferring such status would mean the pensions are to be paid before any unsecured creditors' claims. Independent has asked Wedoff to hear the motion Dec. 17, said Andy Irving, the pension firm's senior vice president and general counsel.

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