Judge Extends Exclusivity For UAL Reorganization
Source: Reuters
Dec 16 (Reuters) - A federal bankruptcy judge on Friday gave United Airlines until March 3 to get its reorganization plan approved without interference by outside parties who would present a competing plan.
The current period of exclusivity for the No. 2 U.S. airline, a unit of UAL Corp., was due to expire on Jan. 2.
United filed its reorganization plan with the court in September and aims to have it approved by creditors and the court in time to exit bankruptcy in February. The deadline for objections to the plan was on Monday, and the carrier received more than 50.
United's Chief Financial Officer Jake Brace said none of those objections were likely to delay the carrier's bankruptcy exit.
"Nothing we've seen so far would disrupt it," Brace told reporters after a court hearing. "We don't think any of them pose a problem."
A key objection came from creditors and unions that disapprove of an incentive plan that would grant the airline's management 18.75 million shares, or 15 percent, of the restructured United.
Unions representing United's flight attendants and ground workers complained that the plan is unfair to workers who made steep wage and benefit concessions to keep the struggling carrier afloat.
The airline has argued, however, that the incentive plan is in line with usual business practices that put a certain amount of managers' compensation at risk in the stock market.
The deadline for eligible parties to vote on the plan is Dec. 19 and a confirmation hearing is set to begin on Jan. 18.
Robert Clayman, attorney for the Association of Flight Attendants, said the airline has yet to provide a thorough explanation of the management incentive plan. He asked for assurance that the airline would provide complete details by Dec. 21.
"There's no reason for this information to be held back," Clayman said.
Brace said he expected all objections to the carrier's reorganization plan to be settled consensually.
United has been in bankruptcy since December 2002 and has been battered along with other major U.S. airline by soaring fuel costs and competition from low-cost rivals.
