PBGC Blasts Delta’s Proposed Pilot Contracts

Law360, New York (May 25, 2006, 12:00 AM EDT) -- Strained to the breaking point, the Pension Benefit Guaranty Corp. has accused bankrupt Delta Airlines Inc. of violating federal pension law with its proposed new pilot contracts, an arrangement that could cost the government-backed insurer billions of dollars.

On Wednesday, the PBGC asked the bankruptcy court to toss out the contracts, contending that the plan “appears to pose a substantial abuse of the federal pension plan termination insurance program.”

The federal pension insurer is expected to assume Delta’s massive pension plan liability—estimated to be around $17.5...
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