decided: February 14, 1984; As Amended March 2, 1984.
ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA.
Gibbons and Becker, Circuit Judges, and Dumbauld, District Judge.*fn*
Air Line Pilots Association, International (ALPA) appeals from an unreported order of the District Court for the Eastern District of Pennsylvania, affirming a decision of the Bankruptcy Court denying ALPA's application for appointment to the Committee of Unsecured Creditors of Altair Airlines, Inc., debtor.*fn1 This court has jurisdiction under 28 U.S.C. § 1293(b). ALPA is the bargaining representative of pilots employed by the debtor. Unpaid wages are due those pilots under the terms of the collective bargaining agreement between ALPA and the debtor. The Bankruptcy Court and the District Court held that under the Bankruptcy Code ALPA was not a creditor and hence was not entitled to membership on the creditors' committee. We reverse.
On November 9, 1982, the debtor, a common carrier airline, filed a petition for reorganization under Chapter 11 of the Bankruptcy Code, 11 U.S.C. § 1101 et seq. ALPA was the exclusive bargaining agent for eighty-eight pilots who on the date of filing were owed $676,120 in unpaid wages and benefits. This sum, in the aggregate, amounts to the second largest unsecured claim against the debtor. ALPA also has a claim for unpaid union dues withheld from pilot wages. On November 18, 1982, ALPA filed an application for appointment to the Committee of Unsecured Creditors.*fn2 The debtor opposed the application, urging that ALPA is not a "creditor holding unsecured claims" within the meaning of 11 U.S.C. § 1102(a), because the unpaid wages were due to individual union members, and the union dues claim was for a small amount. The debtor also urged that ALPA would be a disruptive influence, since the best prospect for reorganization might be a merger or joint venture with a non-union common carrier.
The Bankruptcy Judge denied ALPA's application, holding that it was not a creditor within the meaning of 11 U.S.C. § 101(9) and did not hold a claim within the meaning of 11 U.S.C. § 101(4). That court reasoned that the Bankruptcy Code, in contrast with the 1898 Bankruptcy Act, no longer included in the definition of creditor a "duly authorized agent, attorney, or proxy." Thus ALPA could not act as an agent of its creditor members. As to the meaning of "claim", the Bankruptcy Judge reasoned that the "right of payment" referred to in section 101(4) did not include ALPA's rights under its collective bargaining contract.
The District Court affirmed, relying on dicta in Matter of Schatz Fed. Bearings Co., 5 B.R. 543, 546 (Bankr. S.D.N.Y. 1980) that while a union could serve on a Creditors Committee as a representative for unpaid pension benefit claims, it could not so serve on behalf of unpaid wage claims. The District Court did not rely on the Bankruptcy Court's agency reasoning.
Eligibility for service on a Creditors' Committee depends upon status as a "creditor holding unsecured claims." 11 U.S.C. § 1102(a)(1). This section cross-references to the definitional provisions of the Code. 11 U.S.C. § 101. Section 101(9) defines a creditor as
(A) [an] entity that has a claim against the debtor that arose at the time of or before the order for relief concerning the debtor.
An "entity" is defined as "a person, estate, trust, [or] governmental unit." 11 U.S.C. § 101(14). A "person" is defined as an "individual, partnership, [or] corporation, . . ." 11 U.S.C. § 101(30). Finally a "corporation" includes an "unincorporated company or association." 11 U.S.C. § 101(8)(a)(iv).
ALPA is an unincorporated association, 29 U.S.C. § 185(b). Thus it is an entity within the meaning of 11 U.S.C. § 101(9). The remaining question is whether it "has ...