The International Association of Machinists and Aerospace Workers today sued top executives of United Airlines, claiming they breached their fiduciary duties by deciding to delay contributions to the $6.96 billion United Airlines pension fund. The suit, filed in the U.S. District Court in Chicago, also alleges the executives violated the Internal Revenue Code and ERISA.
United CEO Glenn F. Tilton, CFO Frederic F. Brace, Executive Vice President Peter D. McDonald and the airline's pension and welfare plans committee were named as defendants. "As a result of their fiduciary breach," the filing said, the participants and beneficiaries of the pension fund "have suffered damages from the underfunding of their defined benefit pensions."
Separately, UAL officials met today with officials from the PBGC to discuss the company's strategy for handling the United Airlines pension fund for the remainder of the carrier's Chapter 11 bankruptcy proceedings, said Gary Pastorius, a PBGC spokesman. The outcome of that meeting wasn't known at press time.