Sham Divorce Facilitates Pension Payout

A number of Continental Airline senior pilots across the United States were getting antsy believing that their hard-earned employment pensions might be in jeopardy due to financial difficulties the airline was facing.

To ensure they would receive their pensions, (some pensions were worth as much as $900,000) the pilots opted to divorce their spouses and enter into court orders which transfered the pension to their spouse and paid it out immediately.

Continental Airlines noticed an increase in lump sum payments to spouses of pilots who were of retirement age, but still working. After further investigation, Continental determined that the suspicious divorces were, in fact, part of a scheme to obtain pension funds earlier than might otherwise occur and that relatives of divorced pilots were unaware that their family members were divorced. Some of the pilots even reconciled with their spouses and later remarried.

Continental sued the pilots and sought an order for reimbursement of the pension funds. Continental argued that the pension funds of not-yet-retired pilots were jeopardized by the actions of the senior pilots. The court disagreed with Continental and dismissed their case. The senior pilots were all served “pink slips”.

Someone had a very smart lawyer!

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