Fiduciary Counselors | Clients and Case Studies

Northwest

Northwest Airlines was facing large required pension contributions at a time when the entire airline industry was struggling to recover after the 9-11 attack and the SARS outbreak. Northwest proposed to contribute stock of its regional jet subsidiary, Pinnacle Airlines, to its 3 defined benefit plans. Fiduciary Counselors acted as independent fiduciary under the terms of a prohibited transaction exemption.

As the independent fiduciary, Fiduciary Counselors:
	Negotiated the terms of the contribution, including registration rights and the right to appoint a member of the Pinnacle Board of Directors

	Testified at the DOL hearing on the exemption

	Determined whether the plans should accept the Pinnacle stock and the value at which the stock would be credited against Northwest's required contributions

	Appointed an experienced airline executive to act as the Plans' director on the Pinnacle Board

	Represented the Plans' interest in connection with the subsequent Pinnacle IPO

	Periodically updated union representatives

Some articles about the transaction:

	“Northwest Airlines Can Use Stock Of Unit to Fund Retirement Plans” by Ellen E. Schultz and Susan Carey, August 19, 2003, The Wall Street Journal.	click here

	“U.S. to Allow Northwest Air To Use Stock In Pensions” NY Times, August 19, 2003	click here

	“Northwest Makes Pension Plan Contribution; Allocates Regional Jets”, NWA press release, September 15, 2003.	click here

	“Pinnacle Airlines Announces Initial Public Offering”, Pinnacle press release, November 24, 2003.	click here

	“Northwest Statement Regarding 2004 Pension Funding”, NWA press release, December 23, 2003.	click here

	Federal Register Notice, Volume 68, no. 160, August 19, 2003.	click here