This cannot be good for moral around the office can it?
http://www.cbc.ca/money/story/2006/10/04/aircanada.html
Air Canada pilots try to block proposed $2-billion distribution
Last Updated: Wednesday, October 4, 2006 | 5:32 PM ET
CBC News
The union representing Air Canada pilots has gone to court to try to block a planned $2-billion distribution to shareholders of the airline's parent company.
The move comes just a day before a special shareholders meeting called by ACE Aviation Holdings to vote on the distribution.
In a statement, the Air Canada Pilots Association said the proposed distribution "will restrict Air Canada's ability to meet its financial obligations to its creditors and compromise the airline's ability to weather an economic downturn."
It is asking the court to block the distribution.
"While we recognize the right of management to fairly reward shareholders, this proposed distribution is unprecedented, excessive and could start us on a path towards another round of bankruptcy," said association president Andy Wilson.
The union called the proposed distribution "oppressive," saying Air Canada's pilots are creditors because more than $1 billion in pension obligations remain outstanding from the airline's emergence from bankruptcy protection in 2004.
Shareholders of ACE Aviation Holdings are to vote Thursday at a special meeting in Montreal on a proposal to distribute up to $2 billion in cash and stock.
If shareholders give their approval, they would be given an initial distribution of Aeroplan Income Fund units before the end of the year. ACE Aviation spun off part of its popular loyalty program in a public offering last year but retains a majority interest in it.
The distribution proposal depends on ACE receiving an advance tax ruling that the payout would be treated as a return of capital, rather than a taxable dividend.
Pilots go to court to stop $2M payout....
Moderators: sky's the limit, sepia, Sulako, lilfssister, North Shore, I WAS Birddog
Is it just me, or is parent company burning the furniture? whats going to be left to lean on in the rough times if we keep selling it, spinning it off, or giving it away?
Am I missing something here?
Am I missing something here?
The feet you step on today might be attached to the ass you're kissing tomorrow.
Chase lifestyle not metal.
Chase lifestyle not metal.
I completely agree with the ACPA lawsuit. ACE made a pact with the devil when it accepted monies from these hedge funds. Recent past history has shown that these hedge funds don’t give a damn about the long term survival of ACE or any other company they invested money in.
Hopefully the Government will treat the payout as a taxable dividend which should kill the payout.
Hopefully the Government will treat the payout as a taxable dividend which should kill the payout.
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It's about time
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Update on ACE Aviation special distributions to shareholders. At a special meeting of shareholders held in Montreal this morning, ACE shareholders voted to approve a proposed Plan of Arrangement which would grant authority to the board of directors of ACE to make from time to time one or more special distributions of up to $2 billion to shareholders. The implementation of the plan of arrangement is subject to issuance by the Quebec Superior Court of a final order approving the plan of arrangement.
Employees may well be asking what this really means for Air Canada and its employees.
In essence, the proposal calls for an initial distribution to ACE shareholders of units in the Aeroplan Income Fund. ACE is able to distribute units of Aeroplan without reducing its cash reserves, borrowing funds or incurring any balance sheet liabilities. By distributing units of Aeroplan to its shareholders, ACE is really just giving shareholders direct ownership and control over something they already own indirectly today through their ownership of ACE stock (and, in turn, ACE's majority ownership of Aeroplan). While the timeline and the amount of this special distribution of Aeroplan units have yet to be determined, this proposed distribution to shareholders is similar to the one completed in March of this year when ACE distributed Aeroplan units valued at $251 million (based on the value of Aeroplan units at the time) to its shareholders.
Further distributions, if any, will be determined based on a careful review of ACE's financial position and in the best long-term interests of ACE and its businesses.
The distributions are a part of ACE's value-enhancement strategy designed to benefit the shareholders and employees of ACE companies as a whole by ensuring each company's ability to grow and reinvest in their respective businesses. The current share price of ACE suggests that the market does not adequately recognize Air Canada 's full value. The steps being taken by ACE to highlight the value of Air Canada in the marketplace as part of its value-enhancement strategy will further strengthen the airline which will allow us to continue investing in the company's future. In the history of the North American airline industry there is a short list of companies that have rewarded their investors with attractive returns. These are the same airlines that have grown, flourished and created stable jobs and real opportunities for their employees.
Yesterday, the Air Canada's Pilots Association (ACPA) filed a claim in the Ontario Superior Court of Justice seeking to prevent the proposed special distributions under the plan of arrangement. ACE will work towards a positive outcome for the benefit of all stakeholders.
It is important to note that the proposed special distribution by ACE of Aeroplan units to its shareholders will not in any way impact Air Canada cash reserves or its ability to meet its pension obligations. Air Canada remains fully committed to meeting its pension obligations as agreed to with pension beneficiaries, OSFI and the court in 2004.
Employees may well be asking what this really means for Air Canada and its employees.
In essence, the proposal calls for an initial distribution to ACE shareholders of units in the Aeroplan Income Fund. ACE is able to distribute units of Aeroplan without reducing its cash reserves, borrowing funds or incurring any balance sheet liabilities. By distributing units of Aeroplan to its shareholders, ACE is really just giving shareholders direct ownership and control over something they already own indirectly today through their ownership of ACE stock (and, in turn, ACE's majority ownership of Aeroplan). While the timeline and the amount of this special distribution of Aeroplan units have yet to be determined, this proposed distribution to shareholders is similar to the one completed in March of this year when ACE distributed Aeroplan units valued at $251 million (based on the value of Aeroplan units at the time) to its shareholders.
Further distributions, if any, will be determined based on a careful review of ACE's financial position and in the best long-term interests of ACE and its businesses.
The distributions are a part of ACE's value-enhancement strategy designed to benefit the shareholders and employees of ACE companies as a whole by ensuring each company's ability to grow and reinvest in their respective businesses. The current share price of ACE suggests that the market does not adequately recognize Air Canada 's full value. The steps being taken by ACE to highlight the value of Air Canada in the marketplace as part of its value-enhancement strategy will further strengthen the airline which will allow us to continue investing in the company's future. In the history of the North American airline industry there is a short list of companies that have rewarded their investors with attractive returns. These are the same airlines that have grown, flourished and created stable jobs and real opportunities for their employees.
Yesterday, the Air Canada's Pilots Association (ACPA) filed a claim in the Ontario Superior Court of Justice seeking to prevent the proposed special distributions under the plan of arrangement. ACE will work towards a positive outcome for the benefit of all stakeholders.
It is important to note that the proposed special distribution by ACE of Aeroplan units to its shareholders will not in any way impact Air Canada cash reserves or its ability to meet its pension obligations. Air Canada remains fully committed to meeting its pension obligations as agreed to with pension beneficiaries, OSFI and the court in 2004.
