updated 1/5/2006 4:52:00 PM ET 2006-01-05T21:52:00

Delta Air Lines Inc., facing mounting legal issues surrounding its pilot pensions, can have until July 11 to submit its plan for reorganizing the company under Chapter 11 bankruptcy protection, a U.S. Bankruptcy Court judge ruled Thursday.

The airline originally had until Jan. 12 to submit a plan, and the company's creditors could have submitted alternative plans after that date. But the company faces additional legal battles over its handling of retirees' pensions, and Bankruptcy Court Judge Prudence Carter Beatty agreed to the extension.

Delta retirees have sought to overturn Delta's definitions of qualified and nonqualified payments into the company's pension funds. The retirees maintain that much of Delta's payments are qualified, meaning that they enjoy protection under federal law and must be paid. Delta argues that the payments are nonqualifed.

The Air Line Pilots Association, the union representing pilots, claims Delta missed $145 million in qualified pension contributions on Oct. 15 and has been refusing to pay roughly $7 million a month in nonqualified pension contributions.

Delta officials have said they are still working to save the pension plan, but were unsure whether they could.

Delta, which has lost more than $11 billion over the last five years, filed for Chapter 11 bankruptcy protection in New York on Sept. 14.

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