Our Mission Statement
The American Airlines Retirees Committee (AMRRC) was formed by the retirees of American Airlines, for the retirees, to provide representation for all work groups at American Airlines past, present, or future.. As an organization, we will create the affiliations and partnerships necessary to gather the communication and education needed to ensure each and every retiree’s interests are protected. We are committed to being one voice for many faces.
How Bankruptcy can Affect American Airlines Retirees
What protections do Employees and Retirees for Health and Wwelfare Benefits when a Company files for Chapter 11 bankruptcy?
Bankruptcy protections for Active and Retired employees vary depending on whether the pay and health and welfare benefits were protected by a contract or not and whether the person is Active or Retired when the company filed for Chapter 11 bankruptcy protection. Following the filing by a company for Chapter 11 bankruptcy protection, the laws of the United States allow a business the opportunity to restructure their debts in order to continue operating and to preserve jobs. Companies and individuals to whom debts are owed can expect to lose much of what they were promised, usually pennies on the dollar in the bankruptcy process.
A business such as American, that has made promises to their Employees and Retirees without the benefit of a contract in some areas, may be allowed to make changes, reduce or even terminate Active employees pay and health and welfare benefits as they deem necessary in an effort to reduce their cost structure and exit bankruptcy. Workers protected by a Union contract however, will have the ability to go through an 1113 process, relating to every aspect of their contract provisions before the company can change their contractual work rules and then when and if necessary, enter into an 1114 process to obtain relief with regard to Health and Welfare benefits, Disability and Survivorship benefits and Iife Insurance benefits. Unlike Active workers, Retirees, both Union and Non Union have a limited protection provided to them under the bankruptcy statue 1114 (l) during the bankruptcy process which specifies that a “plan, fund or program” cannot be changed within 180 days of the bankruptcy unless a committee is formed, and the company sits down with the group and tries to work out a compromise that is acceptable to the affected parties or if an agreement cannot be reached by the parties, the Company can go back to court and recommend to the court a solution they believe is fair and favors the balance of the equities. Read more here...
Just a short note to let you know of any Bankruptcy news…which we are sorry to report is zilch. As far we can tell, the 1114 Retiree Committee has not held any meetings for a while. We assume they are awaiting the next ruling from the bankruptcy judge, Judge Lane. The next scheduled 1113 hearing is in August.
In the meantime, AMRRC Chairman Paul Mazzara has written the 1114 committee counsel asking questions about what might happen following the AMR bankruptcy exit. Paul has asked her the question that many retirees have has AMRRC to answer….If the matter of Retiree Medical Benefits is not settled in the Bankruptcy Courts, can the company defund the plans once AMR emerges from bankruptcy? If we receive an answer from the 1114 counsel we will inform you.
It is a known fact that eliminating employee and retiree benefits, especially health care plans are a target during baruptcy. In the previous USAir last bankruptcy, retiree medical insurance was eliminated. During the course of their bk a VEBA (Voluntary Employee Benefits Account) was offered to their retirees.
AMRRC is presently researching VEBA plans to better inform you about them. This may become a subject that retirees need to better understand as our former employer finalizes and emerges from bankruptcy.
If you have further questions regarding your retiree benefits, join AMRRC Chairman Paul Mazzara on his monthly chat Thursday night June 13th from 7p-9p central time. You may join the chat by logging onto www.rbassociation.com