United Wants Time to File Restructure Plan
Tuesday March 11, 1:44 pm ET
CHICAGO (Reuters) - UAL Corp. (NYSE
:UAL - News), parent of bankrupt United Airlines, said it has asked a U.S. bankruptcy court judge to give it more time to file its reorganization plan to make sure it is well thought out.
In court documents filed on Monday, the No. 2 U.S. airline said it is seeking an additional 180 days from April 8 to file its plan. That would give the carrier until Oct. 6 to file, after which competing plans from creditors could be filed.
If UAL gets the extension, the airline would have until Dec. 5 to win approval for the plan from creditors and the court.
UAL filed the largest bankruptcy in aviation history on Dec. 9.
Bankruptcy judges often grant additional time to debtors to file restructuring plans in complex Chapter 11 cases. A spokesman for United said on Tuesday that requests for extensions are "routine."
"The debtors seek these extensions to avoid premature formulation of a Chapter 11 plan and to ensure that the formulated plan takes into account the interests of all the debtors, their employees, their creditors, and their estates," United attorneys said in court papers.
United is negotiating with its labor unions and aircraft financiers to reduce costs and meet separate deadlines on key financial targets set forth in its bankruptcy financing package.
The airline has said it will take the next step in voiding its labor contracts on March 17 if it cannot seal permanent deals with unions by that date.
United's proposed transformation plan, part of its overall reorganization plan, includes among other things the creation of a low-cost carrier. The low-cost concept has been opposed by unionized workers who object to salary scales and bargaining agreements that are separate from those for mainline employees.
US Airways Group (OTC BB
:UAWGQ.OB - News), which filed for bankruptcy in August and submitted its reorganization plan to the court in December, has sought and won several extensions on its restructuring plan deadline. Its plan has yet to be approved by creditors.
Firings, if well done, are good for employee morale.