Home > News > Flight Attendants Strike a Blow Against Greedy Bankruptcy Firms

Flight Attendants Strike a Blow Against Greedy Bankruptcy Firms

Date: September 11, 2007

Company Attorneys and Consultants Blocked from Millions in Bonuses

Washington, DC Northwest flight attendants, represented by the Association of Flight Attendants-CWA (AFA-CWA), today stood squarely in the path of outrageous enhancement fees demanded by four firms that represented Northwest Airlines during its restructuring. The firms were demanding millions of dollars in additional fees for services for which they have already been compensated. The Court agreed with the flight attendants' objection and denied two of the fee applications, delaying until later the hearing on two others.

"If AFA-CWA had not objected today, more millions of dollars of our concessions would have been wasted on these outrageous fees," said Kevin Griffin, Northwest's AFA-CWA Master Executive Council President. "Management did not object to these fees, so the money is clearly available. Since they will not have to pay these ridiculous bonuses, we think it is far better spent on returning some of the pay and workrules the Northwest flight attendants have sacrificed."

The four firms, Cadwalader, Wickersham & Taft LLP; Otterbourg, Steindler, Houston & Rosen, P.C.; FTI Consulting, Inc; and Lazard Freres & Co. have already received tens of millions in fees. The cost of their professional services soaked up a significant portion of the lost wages and benefits for all Northwest employees. Flight attendants alone are working under 40 percent wage and benefit reductions.

The Court recognized that it was the sacrifice of the employees and other factors -- not just the work of these firms -- that helped turn Northwest around. The Court denied the applications from Cadwalader and Otterbourg. The other firms' applications will be heard at a later date. In so ruling, the Court noted the importance that the process be perceived as a fair one, clearly concerned that these outrageous fees would have diminished the fairness of the entire process.

"This is yet another example of why corporate bankruptcy reform is so badly needed in our country," said Griffin. "Here is a company that begged and pleaded with its employees to give up their hard earned wages and benefits so that the airline could survive. The greed has to stop and AFA-CWA is working with supporters in Congress to make sure the laws are changed. This cannot continue to be standard practice in corporate bankruptcy cases."

The hearing on the fee application was held at 11:00 a.m. Tuesday before Judge Alan Gropper of the U.S. Bankruptcy Court for the Southern District of New York. AFA-CWA was joined by the U.S. Trustee and representatives of Northwest's bondholders in opposition to the fees.

For over 60 years, the Association of Flight Attendants has been serving as the voice for flight attendants in the workplace, in the aviation industry, in the media and on Capitol Hill.  More than 55,000 flight attendants at 20 airlines come together to form AFA-CWA, the world's largest flight attendant union. AFA is part of the 700,000-member strong Communications Workers of America (CWA), AFL-CIO. Visit us at www.afanet.org. 

Share this page:

More News