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Question: What was included in the priority checks that were recently sent to Teamsters who worked at Consolidated Freightways (CF)? Answer: In this distribution, CF paid WARN Act settlement funds and undisputed vacation pay, up to the $4,650 maximum. (Undisputed vacation pay means vacation pay that CF admits to owing as a priority claim.) The bankruptcy priority is for wages earned in the last 90 days before the bankruptcy (in this case, September 3, 2002), up to a maximum of $4,650. Remember that the pre-bankruptcy wages you earned just before September 3, 2002, and were not paid until on or after September 3, 2002 also count against your $4,650 priority. Q: All the check amounts are different. Why? A: Employees are not supposed to get identical check amounts. There are many reasons why employees do not make identical amounts of money. For example: The undisputed vacation pay amounts are different for everyone. Everyone has different pre-bankruptcy wages paid post-bankruptcy. Full- and part-time employees also have different WARN Act amounts. Any two checks are the same only by coincidence, even if two employees have the same wage rate, same seniority, etc. Q: Why are my pre-bankruptcy wages being deducted from my current check? A: Only wages that were earned pre-bankruptcy and paid post-bankruptcy are being deducted. (“Paid” means cashed or cleared by the bank.) These amounts are not being deducted from anything owed to you. They did, however, use part of your priority when the bankruptcy court approved an early payment to you in September 2002. If this payment had not been made, your checks would have “bounced” in September 2002 and you would not have had your wages for the past 2+ years. Q: Why am I limited to $4,650? A: This limitation is in federal law. It is part of the United States Bankruptcy Code and is non-negotiable. Q: I have heard that if I worked to clean out the terminal after the bankruptcy, those wages are also being deducted. A: This rumor is false. No employee who worked post-bankruptcy had any part of his post-bankruptcy wages deducted from the current check. Q: How can CF get away with siphoning off money to Conway? A: This rumor is a favorite one of CF employees, but it is just a rumor. No distribution has been made to Conway from the bankruptcy estate. CF was spun off from its holding company in 1996. After investigation, the creditors committee in the CF case found no reason to believe that CF had subsidized Conway or secretly paid its expenses since the spin off. Q: I heard that CF stockholders are cleaning up in this case. A: This rumor is false. CF stock is worthless. CF is about $1 billion short on what it needs to pay its creditors (that is, there will be about $1 billion more in debt than there is money to pay it with). There is therefore no equity in CF. Q: Will there be more distributions? A: Yes. The current check is for priority claims only. Unsecured non-priority claims will be paid, starting later this year, and probably continuing into 2006 or 2007. The expected cumulative ultimate payment is expected (but not guaranteed) to be about 12 cents per dollar. Q: What about the rest of my vacation? A: Vacation pay claims have not been resolved as yet. Any non-priority vacation will be included in the expected 12 percent distribution. Q: My check shows that I got a reduced amount for the WARN Act because my pre-bankruptcy wages reduced my $4,650 priority. Have I lost the difference? A: No. Any priority amounts over the $4,650 will be treated as general unsecured claims and will be included in the expected 12 percent distribution. Q: I have moved and did not receive a check. A: The most common reason for this situation is that the check was sent to an incorrect address. If you have this problem, or another question about your check and your failure to receive a check, Teamsters should contact the union’s attorneys at (414) 271-4500. (If however you did not file a claim with the Teamsters attorneys, and you did not receive a check, the deadline for doing so passed in February 2003, and generally cannot be extended now.) Q: Have the pension and welfare funds received WARN Act money ahead of me, or in an amount greater than I will receive? A: This situation has not occurred and is impossible. You will receive your entire priority before the funds receive any. If you use the $4,650, the funds will receive no priority from you at all. Because the fund's WARN amount is smaller than yours, you will always get significantly more than the funds regardless whether your WARN amount is priority or paid at the expected 12 percent (just the same as when you were working for CF, your wage amount always exceeded benefit contributions). Part of the WARN settlement is earmarked for the health, welfare and pension funds, because the WARN Act specifies that damages include both wages and benefits.
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