UNITED BANKRUPTCY
Phil Mccarten  /  AP
United Airlines CEO Glenn Tilton speaks at a Town Hall meeting Wednesday, Sept. 21, 2005, in Los Angeles. Tilton could receive stock and options worth $15 million, base pay of more than $600,000 annually and a bonus that could double his salary when the carrier emerges from bankruptcy next month, according to company documentsdisclosed in UAL filings with the court Wednesday Jan. 11, 2006. (AP Photo/Phil McCarten)
By Associated Press Writer
updated 1/12/2006 4:43:29 PM ET 2006-01-12T21:43:29

United Airlines' parent company on Thursday said it had resolved its differences with a committee representing unsecured creditors, moving the airline one step closer to its planned exit from bankruptcy next month.

Elk Grove Village, Ill.-based UAL Corp. said both sides had settled objections over the company's Chapter 11 reorganization plan, including its controversial management stock plan.

A final agreement will be filed with the U.S. Bankruptcy Court in Chicago and a judge must sign off on the company's exit plan following a Jan. 18 hearing.

Thursday's announcement keeps the nation's second-biggest airline on schedule to emerge from Chapter 11 in February, and company executives called it "a major step forward in concluding our restructuring."

"We look forward to confirming the (reorganization) plan next week and exiting bankruptcy next month ready to compete with the strongest carriers," United Chief Financial Officer Jake Brace said in a statement.

United's Chapter 11 overhaul began in December 2002. A move that was expected to take about 18 months has taken more than twice as long as the company cut billions in costs and struggled to stop its losses amid high oil prices, competition with discount carriers and its failure to get a government loan guarantee.

Few details of the agreement were released. But the company said it settled disagreements on several issues, including the committee's objections to the management stock plan.

Last month, the group asked a federal bankruptcy judge to block United's plan to give management and other salaried workers at least $96 million in stock and other equity as part of its restructuring plan.

"This has been an extraordinarily complicated restructuring, and we look forward to United's successful exit from bankruptcy as the vital competitor it is," Dana Lockhart, head of the group representing unsecured creditors and chief financial officer at Airbus of North America, said in a statement.

In a related development Thursday, a bankruptcy judge denied a motion filed Monday by retired United pilots seeking a recount of votes cast in the reorganization plan.

Judge Eugene R. Wedoff said the motion did not follow court procedures related to the vote count, but he said he may reconsider the merits of the retired pilots' argument at the next scheduled hearing in the case on Tuesday.

The group claims United failed to count votes of more than 1,500 retired pilots because they wanted greater pension benefits than what was reflected on ballots.

United spokeswoman Jean Medina, would not comment on the judge's ruling, but said United followed all appropriate procedures in the vote count.

Copyright 2005 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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