Hundreds of US Airways Pilots File Court Claim

States That Airline, Union , and Key Investor Formed

A Criminal Enterprise To Steal Pilots' Pension Plan

NEW YORK, June 4 -- More than 200 US Airways pilots filed a civil complaint in federal court on Wednesday alleging that the airline, along with the pilots union ALPA, and a major investor banded together in a criminal conspiracy to steal their pensions away.

The court filing, filed by Mr. Michael Haber, attorney for the group, the US Airways Pilots for Justice was an amended complaint filed in United States District Court in Brooklyn . The pilots' lawsuit alleges that US Airways, Inc. the Air Line Pilots Association, and Retirement Systems of Alabama violated the federal Racketeer Influenced and Corrupt Organizations Act [RICO]. The pilots seek damages of at least $150 million, in addition to the reinstatement of the pilots' defined benefit pension plan, which they contend was stolen from them through the actions of the aforementioned parties.

The court filing also contends that the pilots union aided and abetted company officials in early 2003 when the defined benefit pension plan of US Airways' more than 5000 pilots and retirees and pilots' widows was terminated and traded in for a much more meager defined contribution plan. The union, according to the plaintiff pilots, promised its members that they would have a vote on the matter, but quickly and quietly caved in to the airline without any membership ratification vote. The lawsuit also alleges that the union then reaped the benefits from the plan termination by suddenly becoming the manager of hundreds of millions of dollars of pension monies, as part of the deal to scrap the defined benefit plan.

The complaint also quoted former US Airways chief executive officer David Siegel as telling a tight-knit group of upper management officials shortly after he was hired in early 2002, "Gentlemen, we stand to make a lot of money and we're not going to let the pilot pension fund stand in the way." The suit also lambasted Siegel's vows of a, "labor-friendly Chapter 11 reorganization" as a sham, designed only to lull employees, and the US Airways pilots in particular, into a false sense of security.

Further, according to the lawsuit, there was a "virtually endless series of restructuring agreements," and specifically cited another such agreement that was made in December 2002, in which the pilots union, unlike every other union at US Airways, agreed to virtually every concession requested by the airlines.

The union, the pilots also allege, had a right and duty to audit the pilots defined benefit pension plan on an ongoing basis, but failed to do so, and furthermore lied when it told its members that it had no way of knowing whether or not their pension plan was truly in dire straits. US Airways also agreed to indemnify ALPA for any liabilities arising out of the termination of said pension plan.

Retirement Systems of Alabama (RSA) became the major stakeholder in US Airways during its first bankruptcy, and its president, Dr. David Bronner, emerged as the chairman of US Airways' board of directors in April 2003.

The lawsuit names ALPA, US Airways Group, Inc., US Airways, Inc., RSA, and Retirement Systems of Alabama Holdings, LLC as conspirators in an effort to illegally wrest billions of dollars in pension funds from the pilots to the benefit of each of the parties. Among the claims are that the defendants committed mail fraud, wire fraud, and other types of racketeering activities on an ongoing basis.

US Airways originally filed for bankruptcy protection in August 2002 and emerged from bankruptcy in April 2003, a year and a half before its second foray into Bankruptcy Court.