Northwest Gives Outgoing Chairman a $2 Million Going-away Present

Payment draws immediate court objections from unions who endured sharp pay cuts while the airline reorganized under bankruptcy protection.


MINNEAPOLIS_Northwest Airlines said it would give outgoing chairman Gary Wilson a $2 million (€1.48 million) going-away present, drawing immediate court objections from unions who endured sharp pay cuts while the airline reorganized under bankruptcy protection.

Wilson, who led a leveraged buyout of Northwest in 1989, plans to step down when it emerges from bankruptcy next month.

After creditors had approved Northwest's reorganization plan, Northwest disclosed in a bankruptcy court filing late Monday that it would give Wilson $2 million €1.48 million) in "consideration of the substantial contributions provided by Mr. Wilson to the Debtors during the chapter 11 cases."

Northwest said in the filing late Monday that it would also give Wilson lifetime medical and dental insurance coverage, travel, and reimbursement for up to $75,000 (€55,399.62) per year to run an office.

Unions representing pilots and flight attendants objected on Tuesday, calling on U.S. Bankruptcy Judge Allan Gropper to remove Wilson's payout when he considers Northwest's reorganization plan at a hearing set to begin Wednesday.

"Northwest's apparent determination to make what amounts to a gift to Mr. Wilson by sneaking in a plan supplement at the last minute is an outrage," the Air Line Pilots Association wrote in its objection. It said the disclosure 40 hours before Northwest's confirmation hearing begins leaves no time for the matter to be scrutinized more closely.

"This type of maneuver is contrary to law and good faith ... and destroys employees' and public's confidence in the bankruptcy and judicial systems."

The unions had already objected to Northwest's reorganization plan because it would hand nearly 5 percent of the company over to executives in the form of restricted stock and options, according to earlier disclosures.

Northwest Airlines Corp. spokesman Roman Blahoski said the airline had no comment on the Wilson payment or union objections.

The airline paid Wilson $8,380 (€6,190) last year as an employee, according to a regulatory filing, and another $48,258 (€35,646) in travel and medical expenses. Wilson was once a major Northwest shareholder but sold the bulk of his shares in the months leading up to Northwest's September 2005 Chapter 11 filing.

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