United's tricks

United Taking a Flier With Pensions By Rich Duprey - October 4, 2007

Back in 2005, United Airlines -- later reincarnated as UAL (Nasdaq: UAUA) -- terminated its employee pension plans, creating the single largest corporate pension default in U.S. history.

The belief was that it simply had more liabilities than assets and was under bankruptcy protection already. If it was going to emerge from bankruptcy (which it did in February of 2006), it would need to reduce costs further. Putting the federal taxpayer on the hook for the $6.6 billion in pension plan costs through the federal Pension Benefit Guaranty Corporation, or PBGC, was an easy out.

It seems, though, that the unions, shareholders, creditors, government -- and, most importantly, the retirees -- got hoodwinked. (read more)