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UAL wins extension on reorganization plan

A bankruptcy judge Friday extended until Nov. 1 United Airlines' right to file a reorganization plan without interference from others, but he said it would be the last extension unless some unforeseen circumstance deemed it necessary.
/ Source: Reuters

A bankruptcy judge Friday extended until Nov. 1 United Airlines' right to file a reorganization plan without interference from others, but he said it would be the last extension unless some unforeseen circumstance deemed it necessary.

Judge Eugene Wedoff said the No. 2 U.S. carrier, a unit of UAL Corp. , has addressed the major obstacles that could prevent its bankruptcy exit. Therefore, any further extension of its exclusivity right beyond Nov. 1 would have to have a compelling reason. The current extension was due to expire on Sept. 1.

The carrier, which has been in Chapter 11 since December 2002, has said it aims to file its reorganization plan soon, a move that would initiate its emergence from bankruptcy protection from creditors.

"We're going to be filing a plan, I fully expect, in early September," United Chief Financial Officer Jake Brace told reporters after a court hearing.

The airline has said it hopes to emerge from bankruptcy late this year or early in 2006.

United Chief Executive Glenn Tilton on Thursday said the airline has received proposals for up to $3 billion in exit financing from four financial institutions, which have reviewed the carrier's business plan. United had requested only $2.5 billion in exit financing.

The airline has said the four lending institutions are J.P. Morgan, Citigroup, Deutsche Bank and GE Commercial Finance.