Dow Jones Business News
US Air Gets Nod To Start Alternative Claims Resolution
Thursday March 20, 2:18 pm ET
By Marc Hopkins, Of DOW JONES NEWSWIRES

WASHINGTON (Dow Jones)--US Airways Group Inc. received permission from a bankruptcy court to start an alternative dispute resolution program for claims pending before the company filed for Chapter 11 protection.

The ruling Wednesday by U.S. Bankruptcy Court in Alexandria, Va., allows the air carrier to resolve claims by negotiation or mediation in an expedited fashion.

US Airways said negotiation would provide a cost-effective way to resolve claims through the exchange of written offers between the parties.

Mediation is also advantageous because the two parties can submit their differences to a neutral third party to help achieve settlement. If the parties reach a settlement, the agreement would be binding and subject to the court's approval, the company said.

Court papers said many of the claims that have been filed are disputed by the company. The claims include litigation, personal injury, employment, trade vender claims and claims in connection to the company's aircraft leasing and financing arrangements.

US Airways said it believes the alternative dispute resolution program will save the company and the parties the expense of litigation costs and will help speed up the reorganization process.

Under the alternative dispute resolution program, parties with disputed claims will receive a notice from the court indicating that the program has been approved. Court papers said the parties will have up to 15 days from receiving the notice to say if they want to participate.

The signed and completed form must be sent to US Airways Group Inc., c/o Logan & Co., 546 Valley Road, Upper Montclair, NJ 07043. Court papers said that if claimants fail to respond within the 15-day period, their claims will be forever disallowed against the company and its affiliates.

If claimants choose to participate, they will receive a claim form in which they must provide details of the claim. This form must be sent back to the company within 20 days.

Settlement offers for participants will be made within 45 days after the receipt of a completed statement of claim, court papers said. Initial offers will be made in writing and each claimant is obligated to accept or reject the offers within 15 days of receiving it.

Court papers said that if the two sides can't reach a settlement, then the matter could be turned over to the American Arbitration Association or other mediator that is acceptable to US Airways.

The mediators' fee would be shared equally between the company and the claimant and all fees required to be paid by the claimant must be paid within 30 days after the mediation session.