Bankruptcy judge sets deadline for United's reorganization plan

August 27, 2005|By Robert Manor | Robert Manor,CHICAGO TRIBUNE

A federal bankruptcy judge gave United Airlines yesterday a Nov. 1 deadline to file a plan for exiting Chapter 11, and said if it fails to do so it risks losing control of its destiny.

United has won 10 extensions of its exclusive right to determine its reorganization plan for leaving bankruptcy. "No further extensions will be granted in the absence of compelling and unforeseeable circumstances," Judge Eugene Wedoff said.

Some of United's banking creditors want more say in the airline's business plan. In June, for example, U.S. Bank National Association and the Bank of New York argued that United should face competition in developing its proposed business plan. The plan decides how the future equity and debt of the company will be distributed among the classes of creditors.

Jake Brace, United's chief financial officer, said the airline will beat the deadline. "We are going to be filing in the early part of September," he said.

United says it will exit bankruptcy proceedings this year or early in 2006.

The Chicago Tribune is a Tribune Publishing newspaper.

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