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Delta, U.S. reach deal on pension plan

December 05, 2006|From the Associated Press

ATLANTA — Delta Air Lines Inc. and the Pension Benefit Guaranty Corp. have reached a settlement over some key issues related to the carrier's request to terminate its pilot pension plan.

Under the agreement, the government's pension insurer would get an unsecured claim of $2.2 billion against the nation's third-biggest carrier. That would put it in line with other unsecured creditors for compensation after Delta emerged from bankruptcy protection. But unsecured creditors typically recover only a fraction of what they are owed.

Atlanta-based Delta also said in a U.S. Bankruptcy Court filing Monday that it had agreed to provide in its reorganization plan that the pension agency would get $225 million in senior unsecured notes, which are supposed to be repaid in full after a company emerges from bankruptcy protection. Delta retains the right to replace the notes with cash.

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