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A negotiating committee representing American Airlines pilots union said yesterday that it is close to finalizing contract language for a labor deal with airlines management, Reuters reported. It expects to present a final product to the union board later this week. The board would then review the contract, and if approved, would send it to union members for a ratification vote. Remaining points of the contract which have not yet been agreed upon include language around pay, furlough protection and outsourcing work to pilots who are not represented by the American Airlines union, the group said.

The pilots union at American Airlines said yesterday that a labor deal could be close if the bankrupt airline is willing to make certain key concessions, Reuters reported yesterday. The Allied Pilots Association union, locked in years of tense contract negotiations with the AMR Corp. unit, said that it wants a contract on par with other major carriers, namely Delta Air Lines, on issues such as pay. AMR declared bankruptcy last November, in part to reduce labor costs. While it has reached new contracts with its flight attendants' and ground workers' unions, it remains in negotiations with the pilot group.

American Airlines, citing "good progress" in contract talks with its pilots union and hope for an agreement soon, said on Friday that it would make contributions to a 401(k) plan for pilots as their retirement plans are set to be frozen, Reuters reported yesterday. The AMR Corp unit, which filed for chapter 11 protection last year and is evaluating a potential merger with US Airways Group, is planning to freeze a defined-benefit plan and terminate a separate defined-contribution plan for pilots on Nov. 1. In negotiations with the Allied Pilots Association union, the carrier has proposed replacing both plans by contributing 14 percent of pay into a new 401(k) plan.

Pension changes recently endorsed by the Los Angeles city council do not go far enough for former Mayor Richard Riordan, who aims to put more aggressive fixes on the city's May 2013 ballot, Reuters reported yesterday. The overhaul backed by the leaders of the second-largest U.S. city includes raising the retirement age for new non-safety workers to 65 from 55 and new formulas to reduce their pension payments. New hires also face higher contributions to help with unfunded pension liabilities. The changes are estimated to save Los Angeles $4 billion over 30 years, with savings of $30 million to $70 million over the next five years. Riordan, a former lawyer and businessman turned politician, does not think these estimates are accurate. The assumed savings rely on shaky assumptions on future investment returns at the city's pensions funds, said Alex Rubalcava, an adviser to the former Republican mayor. Rubalcava added that the council did not touch the pensions of future police officers, firefighters and utility employees, leaving Los Angeles open for higher future pension costs.

The head of the pilots' union says the latest delay in American Airlines' bankruptcy case increases the chances that the company will be taken over, presumably by US Airways, the Associated Press reported yesterday. Keith Wilson, president of the Allied Pilots Association, also says that the union's advisers believe that US Airways will pursue a merger, even if American's management opposes a deal. American parent AMR Corp. asked for another month of exclusive rights to present a turnaround plan in federal bankruptcy court. Wilson says that creditors may have pushed the delay to give merger talks more time. A committee representing AMR's unsecured creditors supported the extra time.

Peabody Energy Corp. and Arch Coal Inc. are being sued by mine workers who contend that the companies have an obligation to pay pension and health care benefits that were transferred to Patriot Coal in a 2007 spinoff, Reuters reported yesterday. Eight mine workers and their union, the United Mine Workers of America, are seeking class action status in a lawsuit filed yesterday. The roughly 10,000 union members whose benefits were transferred in the spinoff are worried that Patriot, in chapter 11 bankruptcy, will try to take advantage of laws allowing bankrupt companies to cut retiree health care and pensions. Some of the workers whose benefits were transferred retired before the spinoff and never actually worked for Patriot. Read more:
http://www.reuters.com/article/2012/10/25/patriot-lawsuit-idUSL1E8LOOXT…

In related news, the CEO of bankrupt Patriot Coal is stepping aside less than five months after taking the job, the Associated Press reported yesterday. Irl Engelhardt, a long-time executive at Peabody where he served as chairman and director of one of the world's largest coal producers, took over this year just weeks before the troubled Peabody spin-off sought bankruptcy protection. The company did not provide more details about the change at the top of the company, or about changes to corporate governance announced yesterday. Patriot named Bennett Hatfield to succeed Engelhardt. Read more:
http://news.yahoo.com/another-shift-top-patriot-coal-170854051--finance…

Pay cuts and other concessions by employees of Atwater, Calif., may help the city balance its budget and avoid bankruptcy, Atwater Mayor Joan Faul said on Friday, Reuters reported. Atwater, a city of about 28,000 residents in California's Central Valley, faces a budget gap of more than $3 million and is a candidate to become the fourth city in California this year to seek protection from creditors under chapter 9 after it declared a fiscal emergency this month. Atwater's staff will brief Faul and other city council members today on concessions agreed to by its work force.

San Bernardino, Calif., has failed to make more than $6 million in payments to the state's powerful public employee pension fund, heightening speculation of a high-stakes showdown between the fund and other creditors as the city seeks eligibility for bankruptcy protection, Reuters reported yesterday. Since July 31, the day before San Bernardino declared bankruptcy, the city has failed to make six biweekly employer contribution payments of more than $1 million to the California Public Employees' Retirement System (Calpers). The action taken by San Bernardino is in stark contrast with two other California cities - Vallejo, which emerged from bankruptcy in 2011, and Stockton, which is seeking bankruptcy protection. Both cities decided to keep current on all payments to the pension fund.

A coalition of New York mayors is debating whether to push for changes to state labor law that would give fiscally troubled cities more negotiating leverage with public-safety unions before binding arbitration, the Wall Street Journal reported yesterday. A proposal gaining traction with the mayors of Syracuse, Rochester, Albany and Yonkers would require arbitrators to give more weight to a city's finances when imposing a binding contract. Among the factors would be whether a city can pay for salary increases and health insurance plans without raising taxes or cutting services.

ABI's Commission to Study the Reform of Chapter 11, whose 22 members constitute a venerable bankruptcy industry Hall of Fame, held a hearing yesterday to gather feedback on what is right and wrong with the statutory scheme that has governed chapter 11 bankruptcy since 1978, Reuters reported. The commission's charge includes "literally considering starting from scratch and re-inventing the statute," said Robert Keach, attorney and commission co-chairman. The commission plans to eventually submit a report to Congress, targeted for April, 2014, that could serve as "part blueprint, part outline" for new legislation, Keach said. The commission will study 13 areas of bankruptcy law, including labor & benefits issues, financing rules and government supervision. It is collecting feedback from several groups through a series of hearings, with upcoming dates at the National Conference of Bankruptcy Judges in San Diego on Oct. 26, and a convention of trade group the Turnaround Management Association in Boston on Nov. 3. Read more:
http://www.reuters.com/article/2012/10/18/bankruptcy-reform-idUSL1E8LHP…

To obtain the prepared witness testimony from yesterday's hearing, view background information on the Commission members or to see upcoming dates of activity, please click here: http://commission.abi.org/