Air Canada Pilots Association

Air Canada Pilots Association

October 16, 2006 17:57 ET

Air Canada Pilots Move for Injunction

Motion to Prevent Ace Aviation From Distributing up to $2-Billion to Shareholders

TORONTO, ONTARIO--(CCNMatthews - Oct. 16, 2006) - Air Canada's pilots moved for an injunction with the Ontario Superior Court to prevent ACE Aviation Holdings Inc. from distributing up to $2-billion to shareholders until the court has had sufficient time to hear the lawsuit filed against the company Oct. 4.

"We are proceeding as planned," says Capt. Andy Wilson, president of the Air Canada Pilots Association. "Our case is strong and we are confident that the courts in Ontario will see the $2-billion distribution by ACE as unfairly disregarding the interests of creditors."

The company has until Friday, Oct. 20 to file materials with the Ontario Superior Court of Justice responding to ACPA's request for an injunction.

Capt. Wilson says last week's Quebec court proceeding on ACE's corporate arrangement was an internal mechanical step to simply allow ACE's directors to make multiple distributions without having to seek shareholder approval each time. The Quebec court did not assess whether or not the size of the distribution would have any affect on the economic future of ACE or any of its subsidiaries.

The court action filed against ACE by Air Canada's pilots under the CBCA, commonly known as the 'oppression remedy,' states that the proposed return of up to $2-billion to shareholders is oppressive and unfairly disregards the interests of Air Canada's creditors. Air Canada's pilots are creditors for the about $1-billion in pension obligations that remain outstanding following the company's emergence from insolvency in 2004 as well as for other continuing obligations.

"Air Canada has shown it can prosper. But we are concerned that if this distribution goes ahead, the company would then be on very tenuous financial footing and unable to weather a downturn in the economy," Wilson says.

Media reports this morning announced that ACE will be issuing a $200-million initial public offering (IPO) of Air Canada. Capt. Wilson says the pilots' legal and financial advisors will be studying the IPO documents once they become available.

ACPA is the largest professional pilot group in Canada, representing 3,100 pilots who operate Air Canada's mainline fleet.

Contact Information

  • ACPA Communications
    Carl Mavromichalis
    Media Contact:
    (416) 578-2272