US Airways 2007 Annual Report Download - page 145

Table of Contents
US Airways, Inc.
Notes to Consolidated Financial Statements — (Continued)
SFAS No. 159 on January 1, 2008, but has not yet elected the fair value option for any items permitted under SFAS No. 159.
2. Emergence from bankruptcy
(a) Emergence and Claims Resolution
On September 16, 2005, the Bankruptcy Court entered an order approving and confirming the Joint Plan of Reorganization of US
Airways, Inc. and Its Affiliated Debtors and Debtors-in-Possession (the "Plan of Reorganization"). The Plan of Reorganization provides
for a reorganization of each of the five Debtors. In accordance with the Plan of Reorganization, US Airways Group entered into a merger
transaction with America West Holdings.
Initially, the equity of the new US Airways Group was allocated to three categories of holders. First, existing shares of America
West Holdings were converted into shares of common stock of US Airways Group. Second, the new equity investors received shares for
their initial investments and the exercise of their options. Third, unsecured creditors of the Debtors have received or will receive
distributions totaling 8.2 million shares of the new common stock of US Airways Group in satisfaction of allowed unsecured claims,
including shares issued to the Pension Benefit Guaranty Corporation ("PBGC") and the Air Line Pilots Association ("ALPA").
The Plan of Reorganization classified claims into classes according to their relative seniority and other criteria and provides for the
treatment for each class of claims. Pursuant to the bankruptcy process, the Debtors' claims agent received approximately 4,600 timely-
filed proofs of claims as of the general bar date totaling approximately $26.4 billion in the aggregate, and approximately 530 proofs of
claims timely-filed by governmental entities totaling approximately $13.6 billion in the aggregate. The Debtors continue to be responsible
for administering and resolving claims related to the bankruptcy process. As of December 31, 2007, there are $267 million of unresolved
claims. The ultimate resolution of certain of the claims asserted against the Debtors in the Chapter 11 cases will be subject to
negotiations, elections and Bankruptcy Court procedures. The recovery to individual creditors ultimately distributed to any particular
general unsecured creditor under the Plan of Reorganization will depend on a number of variables, including the agreed value of any
general unsecured claims filed by that creditor, the aggregate of all resolved general unsecured claims and the value of shares of the new
common stock of US Airways Group in the marketplace at the time of distribution. The effects of these distributions were reflected in US
Airways' financial statements upon emergence and will not have any further impact on the results of operations.
PBGC Claim — On November 12, 2004, US Airways filed a motion requesting a determination from the Bankruptcy Court that US
Airways satisfied the financial requirements for a "distress termination" under section 4041(c)(2)(B)(ii)(IV) of the Employee Retirement
Security Act of 1974, as amended ("ERISA"), of the Retirement Plan for Flight Attendants in the Service of US Airways, Inc. ("AFA
Plan"), the Pension Plan for Employees of US Airways, Inc. Who Are Represented by the International Association of Machinists and
Aerospace Workers (the "IAM Plan"), and the Retirement Plan for Certain Employees of US Airways, Inc. (the "CE Plan"), as well as
approval of each plan's termination. These plans had aggregate benefit obligations of $2.71 billion and aggregate plan assets of
$1.76 billion, as of the plans' termination dates in January 2005. On January 6, 2005, the Bankruptcy Court entered an order (i) finding
that the financial requirements for a distress termination of the plans had been met and (ii) approving termination of the plans. The AFA
Plan and the IAM Plan were terminated effective January 10, 2005, which was the date agreed to by the PBGC and US Airways. The CE
Plan was terminated effective January 17, 2005, which was the date agreed to by the PBGC and US Airways. Effective February 1, 2005,
the PBGC was appointed trustee for each of the three plans. As a result of these terminations, the PBGC filed claims against US Airways
for the unfunded portion of each of the plans. Under the Plan of Reorganization, the PBGC received, as treatment for its claims: (i) cash
in the amount of $13.5 million; (ii) an unsecured promissory note in the principal amount of $10 million issued by US Airways and
guaranteed by US Airways Group, bearing interest at a rate of 6.00% per annum payable annually in arrears, with such promissory note
to be payable in a single installment on the seventh anniversary of the effective date of the Plan of
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