According to the Pittsburgh Tribune-Review, the sale by the private-sector pension insurer was disclosed Monday in a regulatory filing. The proceeds of the sale will go to pay benefits to US Airways pilots, flight attendants, and other employees.
The PBGC had a $3 billion claim against US Airways when the airline merged with America West Holdings Corp. in 2005.
When the PBGC agreed to cover the liabilities of three of US Airways’ pension plans, they were 40% funded (See PBGC Takes Over Three US Airways Pension Plans at $2.3B Cost).
In addition to the sale of the stock, the move commenced a deal spelled out by a federal judge in September 2005 between the airline and the PBGC in which US Airways would pay $13.5 million in cash and give the PBGC a $10 million note. The deal was considered a step in the direction of resolving the insurer’s nearly $2.7 billion in claims in the airline’s bankruptcy estate (See PBGC-US Airways Pension Deal Gets Court Signoff ).
The move by the PBGC comes nearly two weeks after a group of U.S. Senators told the agency that the airline could afford to take back some of its obligations, because it hadreported a profit of $292 million over the first three quarters of 2006, as well as cash and investments totaling $3 billion at the end of the third quarter (See Senators Ask PBGC to Return Some US Airways Pension Liabilities ).