I'm glad that they are taking full advantage of ch11 and not rushing things. Sounds like October will be a big month for details to be released.
Keep up the great work!
WASHINGTON -- UAL Corp. (UALAQ), the parent of United Airlines, is asking the bankruptcy court overseeing its case for six more months to file a Chapter 11 reorganization plan without the threat of other parties filing plans for the carrier.
According to a motion filed late Monday and obtained by Dow Jones Newswires, UAL is asking the U.S. Bankruptcy Court in Chicago to extend the company's exclusive period to file a plan through April 6. If UAL files a plan by that date, other parties would be further prohibited from filing plans through June 7 while the carrier solicits votes for its plan.
In a prior extension, the airline's exclusive plan-filing period is set to expire Oct. 6.
The Chicago bankruptcy court is scheduled to consider the proposed extension at a hearing Sept. 19. Interested parties may file objections through Friday.
In its motion, UAL said it has accomplished "a great deal" since filing for bankruptcy protection at the end of 2002. Among its successes the carrier cited its debtor-in-possession financing agreement, the preservation of tax benefits known as operating loss carryforwards, the implementation of a key employee retention plan, and constant interaction with creditors.
Despite the size and complexity of the case, the filing said, the airline has already successfully stabilized its business and achieved "substantial" cost savings. Specifically, the motion said, United Airlines is on track to reduce its costs by $5 billion annually - almost one-third of its 2002 operating expenses.
UAL said, however, that several matters must become clear before the company will be in a position to file a reorganization plan. Some of those matters include UAL's efforts to adjust cost and capital structure, the evolution of the company's relationships with their business partners, pension and retiree liabilities, efforts to secure exit financing and the total amount of claims against the carrier's estate, the motion said.
The filing said that UAL is working with its committee of unsecured creditors and other parties - as well as potential capital market participants - to develop exit financing and to solicit views about an optimal business plan. UAL said it can hope to secure exit financing to fund a reorganization plan only after the company has "greater clarity" about its pension and retiree liabilities.
"Once these issues are more fully resolved and their impact is clear to (UAL) and potential exit lenders, (UAL) will have the information necessary to determine their path" to exit bankruptcy with greater certainty, the company said in the motion. The airline said that a premature end to the exclusive plan-filing period would compromise UAL's previous achievements during the Chapter 11 process.
In the motion, the carrier noted that its earnings from operations in July of $35 million marked "a significant turnaround from July 2002."
UAL said in the filing Monday that the "sheer size" of its business operations and finances "resulted in one of the largest and most administratively complex Chapter 11 cases ever filed." As a result, the airline said, it must devote "considerable resources simply to manage" the case appropriately.
The company also cited the war in Iraq, continuing unrest in the Middle East and the U.S. economy as factors contributing to uncertainty in its revenue environment. The motion said UAL believes that "more actual results over the coming months, as opposed to projections, will provide greater guidance" to the company and potential exit lenders about the durability of its business plan.
UAL listed assets of $84.3 million and debts of $126.6 million as of Sept. 30, 2002, when it filed for bankruptcy protection Dec. 9, 2002. United Airlines listed assets of $22.73 billion and debts of $21.48 billion as of the same date in another Chapter 11 filing Dec. 9.
-By Nicholas P. Braude; Dow Jones Newswires; 202-862-1355; [email protected]
Keep up the great work!
WASHINGTON -- UAL Corp. (UALAQ), the parent of United Airlines, is asking the bankruptcy court overseeing its case for six more months to file a Chapter 11 reorganization plan without the threat of other parties filing plans for the carrier.
According to a motion filed late Monday and obtained by Dow Jones Newswires, UAL is asking the U.S. Bankruptcy Court in Chicago to extend the company's exclusive period to file a plan through April 6. If UAL files a plan by that date, other parties would be further prohibited from filing plans through June 7 while the carrier solicits votes for its plan.
In a prior extension, the airline's exclusive plan-filing period is set to expire Oct. 6.
The Chicago bankruptcy court is scheduled to consider the proposed extension at a hearing Sept. 19. Interested parties may file objections through Friday.
In its motion, UAL said it has accomplished "a great deal" since filing for bankruptcy protection at the end of 2002. Among its successes the carrier cited its debtor-in-possession financing agreement, the preservation of tax benefits known as operating loss carryforwards, the implementation of a key employee retention plan, and constant interaction with creditors.
Despite the size and complexity of the case, the filing said, the airline has already successfully stabilized its business and achieved "substantial" cost savings. Specifically, the motion said, United Airlines is on track to reduce its costs by $5 billion annually - almost one-third of its 2002 operating expenses.
UAL said, however, that several matters must become clear before the company will be in a position to file a reorganization plan. Some of those matters include UAL's efforts to adjust cost and capital structure, the evolution of the company's relationships with their business partners, pension and retiree liabilities, efforts to secure exit financing and the total amount of claims against the carrier's estate, the motion said.
The filing said that UAL is working with its committee of unsecured creditors and other parties - as well as potential capital market participants - to develop exit financing and to solicit views about an optimal business plan. UAL said it can hope to secure exit financing to fund a reorganization plan only after the company has "greater clarity" about its pension and retiree liabilities.
"Once these issues are more fully resolved and their impact is clear to (UAL) and potential exit lenders, (UAL) will have the information necessary to determine their path" to exit bankruptcy with greater certainty, the company said in the motion. The airline said that a premature end to the exclusive plan-filing period would compromise UAL's previous achievements during the Chapter 11 process.
In the motion, the carrier noted that its earnings from operations in July of $35 million marked "a significant turnaround from July 2002."
UAL said in the filing Monday that the "sheer size" of its business operations and finances "resulted in one of the largest and most administratively complex Chapter 11 cases ever filed." As a result, the airline said, it must devote "considerable resources simply to manage" the case appropriately.
The company also cited the war in Iraq, continuing unrest in the Middle East and the U.S. economy as factors contributing to uncertainty in its revenue environment. The motion said UAL believes that "more actual results over the coming months, as opposed to projections, will provide greater guidance" to the company and potential exit lenders about the durability of its business plan.
UAL listed assets of $84.3 million and debts of $126.6 million as of Sept. 30, 2002, when it filed for bankruptcy protection Dec. 9, 2002. United Airlines listed assets of $22.73 billion and debts of $21.48 billion as of the same date in another Chapter 11 filing Dec. 9.
-By Nicholas P. Braude; Dow Jones Newswires; 202-862-1355; [email protected]
