Supplement B Pilot Beneficiaries v. AMR Corp. (In re AMR Corp.)

No. 14-4274-bk (2d Cir. Dec. 7, 2015) (summary order)
Affirming the district and bankruptcy court judgments/orders, the Second Circuit held, inter alia, (1) debtors' negotiations with union, as "authorized representative" of employees, complied with Section 1113 (debtor was not required to meet with subgroup of employees); (2) bankruptcy court's rejection of collective bargaining agreement's (CBA) option for lump-sum retirement benefits was supported by the record, incl. statistics showing that the lump-sum option was associated with higher retirement rates causing strain on the retirement plan; (3) bankruptcy court's extinguishment of grievances filed under the rejected CBA fell within the court's Section 105(a) general equitable powers; and (4) notwithstanding mandatory arbitration provisions under the Railway Labor Act (RLA), rejection of the CBA and extinguishment of grievance claims thereunder were issues to be resolved under the Bankruptcy Code and not the CBA or RLA.
Procedural context:
Bankruptcy Court entered orders (1) granting debtors' motion to reject CBA with its pilots; (2) eliminating the Supplement B Pilots' option for lump-sum payouts at retirement; and (3) extinguished grievances filed pursuant to the rejected CBA. The District Court affirmed the Bankruptcy Court's order in three judgments.
Appellants, the Supplement B Pilots, were a subgroup of the pilot's union that engaged in CBA negotiations with the debtor-appellees, American Airlines.
D. Jacobs, R. Lohier, G. Crawford (sitting by designation)

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