UAL Corp., Chicago, is seeking a permanent injunction to stop two lawsuits filed by United Airlines' machinists union concerning the company's delayed contribution to the airline's pension plan.
The UAL complaint, filed Monday in U.S. Bankruptcy Court in Chicago, said prosecuting the lawsuits while the airline is in Chapter 11 bankruptcy proceedings is "entirely unnecessary and will clearly disrupt United's reorganization efforts."
The International Association of Machinists and Aerospace Workers filed the lawsuits late last week in two federal district courts against the airline, United CEO Glenn Tilton, CFO Frederic F. Brace and Executive Vice President Peter D. McDonald, claiming they breached their fiduciary duty. The first suit, filed Thursday in the U.S. District Court in Chicago, also claimed the executives violated ERISA and the Internal Revenue Code. The airline said in the complaint that it considers both of the suits "baseless."
UAL noted in its complaint that it purchased fiduciary insurance policies that could cover a portion of the claims alleged by the IAM, although the limits under the policies are "hundreds of millions of dollars less" than the amounts claimed by the defendants. Neither lawsuit specified the amount sought.
A hearing on UAL's injunction request is slated for Aug. 20; the deadline for interested parties to object is Aug. 9.