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Equity Claim Distribution Information
ATTN: LAA Flight Attendants

January 9, 2015

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Bankruptcy Equity Claim Share Distribution Update For LAA Flight Attendants

Q: In November 2014, AA announced there would be an additional distribution of shares to eligible LAA Flight Attendants from the Disputed Claims Reserve. Why hasn’t APFA distributed those shares to eligible Flight Attendants?

A:  In November 18, 2014, 18,565 shares were distributed to APFA and deposited into the APFA Trust Account. In combination with 5,790 residual shares (shares resulting from rounding shares), the Trust currently holds 24,355 shares. Like APA and TWU, APFA decided not to distribute its November allocation because it was so small that many eligible individuals would not have received a single share.

Remember that a Flight Attendant’s allocation of stock is based on the wages they earned from January 1, 2009, through August 31, 2012. Their pro rata allocations of stock reflect the wide range of Flight Attendant earnings during this period.

Consequently, all eligible Flight Attendants do not receive the same number of shares. For example, if there were 32,000 shares of stock available for distribution and the number of eligible Flight Attendants were 16,000, each Flight Attendant would not receive 2 shares. Instead based on the differences in allocations, 3,000 eligible LAA Flight Attendants would receive no shares while the vast majority would receive between 2 to 4 shares.

With only 24,355 shares now available for distribution, almost 25% of the Flight Attendants would be excluded. In comparison, in the last distribution to Flight Attendants, which was made in July when 78,961 shares were distributed, only 8% of the eligible Flight Attendants received zero shares.

If distributions were made regardless of how few shares were available, only the Flight Attendants with the highest allocations would benefit and those with lower allocations would never be able to participate. In determining when to distribute shares from the Trust Account, APFA has considered two objectives: to maximize the number of Flight Attendants who receive at least one share, and to limit the time that shares are held in the Trust Account before being distributed.

Based on these considerations, APFA has decided the following:

Starting with the next distribution, shares of stock will be distributed at the earlier of when:
(1) the number of shares available for distribution is 70,000 or more. (At this level, 90% of the eligible LAA Flight Attendants would receive at least one share); or

(2) six months from the date of the last deposit of shares into the APFA Trust Account.

Here’s an example of how this would work:
Assume that on March 1, 2015, 20,000 more shares are allocated to APFA and deposited in the APFA Trust Account. At that point the Trust would hold 44,355 shares (20,000 + 24,355). Six months from this date would be September 1, 2015.

If at any time during this six month period there was a subsequent distribution sufficient to reach the 70,000 share threshold, the shares would be allocated to eligible Flight Attendants.

If, instead there were no other distributions during these six months or the distribution was not large enough to reach the 70,000 threshold, the shares, whatever the number, would be distributed to eligible Flight Attendants on September 1.

Leslie Mayo
APFA National Communications Chair