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United resolves disclosure objections

United Airlines told a bankruptcy judge Thursday that it has resolved the major objections to its disclosure statement, clearing the way for approval of a key part of its bankruptcy exit plan.
/ Source: The Associated Press

United Airlines told a bankruptcy judge Thursday that it has resolved the major objections to its disclosure statement, clearing the way for approval of a key part of its bankruptcy exit plan.

Judge Eugene Wedoff is expected to sign off on the plan as soon as Friday at the carrier’s monthly bankruptcy hearing. The disclosure statement outlines how creditors will be paid and details how it intends to carry on after leaving Chapter 11.

Objections by the government’s pension agency and others had threatened to complicate United’s plan for emerging from bankruptcy in February after a three-year restructuring. But United spokeswoman Jean Medina said the company made changes to its disclosure statement this week that settled 17 of the complaints, including those of the creditors’ committee and the Pension Benefit Guaranty Corp.

The settlements with the PBGC and others will not add to the cost of United’s bankruptcy reorganization, she said.

The pension agency had dropped its resistance to United’s controversial pension termination last April in exchange for up to $1.5 billion in notes and convertible stock in a reorganized UAL Corp., United’s holding company. It then threatened in a court filing last week to take up the fight again because the recently released disclosure plan put onerous restrictions on its ability to sell that stock and would breach the agreement.

PBGC spokesman Jeffrey Speicher indicated the issue has not yet been entirely resolved.

“The company amended its disclosure statement consistent with the agency’s objection, so we withdrew the objection,” he said. “But we reserve the right to object if agreement on the underlying issue is not reached.”