There have been a number of people with Class 5 claims who tried to elect to have their claims converted to cash rather than get paid in stock, but ended up being paid in stock. We have researched this thoroughly now and discovered that roughly 300 people sent in there ballots with a cash election, but those ballots were late in getting in and their payments were therefore defaulted to stock.

We've received many questions from retirees about the dollar amount of the claims, concerning why those checks were much less than they expected. A number of retirees have also reported that for claims over $2,000, they wanted to receive cash, but were paid in Delta stock instead. Below are some answers to some of the frequently asked questions.

The Term Sheet(agreement between Delta and the Non-Pilot 1114 Committee, not the DALRC) provides that the non-contract claims are allowed in an amount equal to the premiums for January 2007 though and including the month that the Plan(Delta'a Bankruptcy Exit Plan) is confirmed. The Plan was confirmed in April.

The Term Sheet also provided that these claims would be estimated for voting purposes assuming a June 2007 Confirmation (when the Term Sheet was negotiated, it was obviously impossible to know when confirmation would actually be).

As a result, these retirees were permitted to vote a 6-month claim, but were paid a 4-month claim. This was all set out in the motion that allowed these claims, as well as the letters sent to the affected retirees in January

Delta is getting ever closer to confirmation of its bankruptcy plan of reorganization and emergence from bankruptcy. Delta has now sent retiree creditors a withholding notice explaining the mechanics of how Delta will be withholding a portion of what is distributed under its confirmed plan for taxes. A copy of Delta's letter of explanation (the "Withholding Letter") is here and their withholding notice is here.

Q: I'm a non-pilot retiree, and Delta has me listed for a $0 claim. How come I don't have a claim for lost health benefits?

A: Some non-pilot retirees under 65 who did not leave Delta under an early retirement package were paying 100% of the premiums for their medical benefits before the changes that became effective on January 1, 2007. Since those retirees were paying 100% both before and after the recent changes, they do not have a claim for the lost value of benefits-they didn't lose any subsidy during the bankruptcy case. Your being in that group is one reason Delta would list you as having a $0 claim.

If you recently received a letter from Community Care Rx SM(CCRx) asking you to confirm your intent to enroll with CCRx plan sponsored by the DALRC, please read the two options listed below:

Option 1 If your prescription drug coverage is only through CCRx please disregard the letter you received and be assured that you are still enrolled with us. This letter was sent in error. We apologize for any confusion this letter may have caused.

Option 2: If you have prescription drug coverage through a plan other than CCRx, please call CCRx customer service at 1-866-316-6052 and talk to a representative.

If you have any questions or concerns please call CCRx at 1-866-316-6052 and we will be happy to assist you.

On Jan.25, 2007, Delta began mailing packages to retirees and survivors that describe the amount of unsecured claims they may have through Delta’s bankruptcy process and other information relevant to such claims. The claims are part of Delta’s agreements with the pilot and ground/flight attendant retiree committees established by the Bankruptcy Court in connection with changes to Delta’s retiree health care coverage.

Delta recently agreed to return $70 million to the Delta Family Care Disability and Survivorship Trust for the benefit of non-pilots and their survivors. (The pilots have a separate funded trust.) Over a year ago, the Non Pilot 1114 Committee brought it to the attention of Delta and the Bankruptcy Court that the trust agreement for the Disability and Survivorship Trust had never been amended to permit Delta to take severance benefits out of the trust. The Bankruptcy Court ruled that whether or not there was proper authorization, Delta had not violated bankruptcy law, since eligible participants of the Trust continued to receive their disability and survivorship benefit payments without interruption.

Q: I'm a non-pilot retiree, and Delta has me listed for a $0 claim. How come I don't have a claim for lost health benefits?

A: Some non-pilot retirees under 65 who did not leave Delta under an early retirement package were paying 100% of the premiums for their medical benefits before the changes that became effective on January 1, 2007. Since those retirees were paying 100% both before and after the recent changes, they do not have a claim for the lost value of benefits-they didn't lose any subsidy during the bankruptcy case. Your being in that group is one reason Delta would list you as having a $0 claim.

Q: The paperwork I got from Delta says that they will be withholding part of the money they will pay me for my bankruptcy claim, for withholding taxes. How come? If you get a payment from a court case, isn't it tax free?

A: If you recover for physical injury, the payment is usually tax free, but other payments can be taxable. But the health benefits retirees are being compensated for losing were tax exempt, and we are currently following up with Delta to determine whether withholding is actually necessary for retiree medical claims.

Q: I am a retiree and I just got a notice from Delta saying that my claim for lost retiree medical benefits will be "allowed" in the bankruptcy and that I will get to vote on the bankruptcy plan of reorganization. What does this mean?

A: The Section 1114 Committee representing non-pilot retirees reached a bankruptcy-court approved agreement with Delta in October, 2006 that permitted Delta to modify retiree medical benefits. Part of that agreement required Delta to provide claims for the retirees affected-just like other creditors who were not paid, and therefore have a claim in the bankruptcy. When Delta cut benefits, many of the retirees lost valuable subsidies from Delta, and similarly should have a claim in the bankruptcy. Delta's actuaries and the actuaries working with the non-pilot 1114 committee agreed on the proper formula for calculating the claims for non-pilot retirees for lost benefits, and Delta has now amended its bankruptcy schedules to allow those claims, so the claimants can vote on the plan (like other creditors) and share in any distribution to creditors under the plan.

Q: Do I lose anything if I accept what Delta pays me in a bankruptcy plan?

A: No. Bankruptcy law, the orders of the bankruptcy court, and any plan of reorganization confirmed in the bankruptcy case govern how Delta discharges its obligations to creditors (including retirees.) Your accepting stock or cash payments from Delta under any confirmed bankruptcy plan will not separately or independently release Delta from its pre-bankruptcy obligations.

Q: What's the point of a bankruptcy claim? I mean, the company is in bankruptcy, which mean that it doesn't have money to pay its creditors, right? Is a bankruptcy claim worth anything?

A: That depends on the bankruptcy plan that is eventually confirmed in the case, but third parties have reportedly recently bought claims in the Delta bankruptcy case for over sixty cents on the dollar (that is, for example, they paid $60 for a claim representing a $100 debt.) Delta's originally filed Disclosure Statement and Plan of Reorganization (which may be modified or amended and are not yet necessarily in final form) stated that larger claims for lost retiree benefits (between $2000 and $100,000) would be paid an estimated between 63 and 80 cents on the dollar, either in the form of stock of the reorganized Delta or (at the retiree's election) in the form of the cash from Delta's sale of that stock. Smaller claims for lost retiree benefits (under $2000) were described as getting cash equal to the mid-point of the estimated payment range?

Q: Paid "in Delta stock"? Isn't Delta stock essentially worthless?

A: Stock in Delta prior to the confirmation of the bankruptcy plan is, and will be, essentially worthless. But as part of its proposed plan, Delta hopes to emerge as a successful "reorganized" business free from much of its old debt, and newly issued stock in this reorganized company should be worth something.

Q: I am a non-pilot retiree with a small claim in the bankruptcy. But I have been comparing notes with others, and some other non-pilot retirees have much larger claims, and I know of a pilot retiree who is getting a claim for many tens of thousands of dollars. How come?

A: Different people had very different contractual rights coming into this process, and their benefits suffered different modifications. The result is, as you have noticed, very different bankruptcy claims for different people. Some are much, much larger than others. In general, for non-pilots, PensionPlus and ERMO early retirees who were substantially under 65 will get much larger claims than others, because in the bankruptcy they lost a contractual right to free medical premiums until they reached age 65. Other non-pilot retirees simply suffered a benefit change that Delta could have made the day after emerging from bankruptcy, and their only bankruptcy claim will be for the value of benefits lost during the bankruptcy case-not for the value of benefits lost in the future. Pilot retirees, however, had contractual benefits for life, and many of those benefits lost (especially for pre-1997 retirees) were very expensive, and had a large value over an estimated many, many years to come. Pilots also lost their non-qualified pensions as part of the bankruptcy and they have a large claim for the loss of those benefits as well. Most non-pilots did not lose non-qualified pensions in the bankruptcy. Because pilots had contractual protections for lifetime benefits, they have large claims. Because non-pilots do not have contractually protected lifetime benefits, they do not have claims that are as large.

Q: What does it mean to vote on a plan of reorganization?

A: Creditors vote on a plan of reorganization, and there are certain creditor votes that are required for a company like Delta to confirm its plan and get bankruptcy court approval to emerge successfully from bankruptcy.

Q: How should I vote?

A: Our Section 1114 Committee is still evaluating Delta's proposed bankruptcy plan, what it means for retirees and their claims, and the alternatives. We expect that by the time the ballot for voting goes out to retirees and other creditors that our committee will include a recommendation either to vote in favor or against that plan. Please check back for more information.

DALRC Retiree Service Center Information

Prescription Drugs Each plan participant in the DALRC Retiree Medical/Prescription Drug plan should have received a letter from MemberHealth (Community Care RX) with their own information on it to take to the pharmacy until their drug card arrives in the near future. An error was made on the phone number provided in the letter for calling to verify your coverage. It should have read 1-866-316-6052. This is a toll free number but it does not begin with 800. Please make the change to the letter to correct the phone number until you receive your drug card.