MINNEAPOLIS (AP) -- The union representing Northwest Airlines flight attendants is suing the airline to make sure it abides by the terms of a 1993 stock compensation agreement.þþThe lawsuit was filed after Northwest said Tuesday that it would pay cash to buy back the $226 million in preferred stock, but said it would not decide until Aug. 1 whether it would buy back the shares this year.þþThe shares have been held by ground workers and flight attendants since 1993, when they were given stock equal to a dollar-for-dollar return on their concessions.þþ``Our members lived up to their end of the bargain and we expect no less from Northwest Airlines,'' said Mollie Reiley, trustee of Teamsters Local 2000, which filed the lawsuit in a New York state court.þþEach participating flight attendant holds preferred shares worth between $7,000 and $18,000 covering the compensation they gave up between August 1993 and July 1996.þþWhile Northwest officials wouldn't comment on the lawsuit because they hadn't reviewed the complaint, spokesman Bill Mellon said Northwest considers the repurchase an ``important obligation.''þþMellon said the company consistently has told employees that the repurchase decision will be made by the board of directors around Aug. 1.þþ``At this time, no final decision has been made by the company,'' he said Tuesday.þþThe 1993 agreement sets up remedies if the Northwest is not in a position to buy back the stock on Aug. 1, Mellon said.þþThe first remedy, he said, is the stock would begin to earn a quarterly dividend at 12 percent a year, based on the $46.96 price. He said that dividend would remain in effect until Northwest repurchases the shares.þþThe second remedy would be that the three labor positions on the board of directors would double, with the International Association of Machinists, the Teamsters and the pilots' union each getting an additional seat.þþThe third option would be for the company to repurchase the stock in chunks as it has ``available cash,'' Mellon said.þþThe Eagan-based airline has lost $1.6 billion since early 2001 due to the slow economy, the Sept. 11 terrorist attacks, a drop-off in business travel and increased competition from low-fare carriers. Northwest has said it doesn't expect to return to the black anytime soon.þþ
Source: NY Times
