United Airlines is "steadily marching towards emergence" from Chapter 11 and intends to file its long-awaited reorganization plan Wednesday, the parent company of the nation's No. 2 carrier said in a report to bankruptcy court.
UAL Corp. said the filing will initiate a monthslong bankruptcy exit process, keeping it on target to emerge from bankruptcy in early 2006. Its restructuring was initially expected to last 18 months but now will take more than twice that long.
In a document filed with the court on Friday that became available electronically Tuesday, the Elk Grove Village, Ill.-based company proposed a series of hearings over the next four months culminating in what it hopes will be final confirmation of its plan. It proposed Dec. 1 as the final deadline to object to the plan.
The reorganization plan being unveiled Wednesday is expected to detail the company's proposal for repaying its creditors and its blueprint for operating profitably once it leaves bankruptcy. The airline has lost more than $10 billion since 2000, although it has reported operating profits this summer, excluding its hefty restructuring costs.
The company said last month it had secured commitments for up to $3 billion in debt financing from four lenders willing to back its exit plan _ Citigroup Inc., JPMorgan Chase & Co., General Electric Co. and Deutsche Bank AG _ although it did not lay out specifics of the proposed financing. The money would enable UAL to pay off a $1.3 billion interim financing loan and provide operating cash for after bankruptcy.
UAL acknowledged in the filing that numerous parties are lined up to likely oppose financial particulars of its plan, estimating that unsecured claims against it may ultimately total as much as $30 billion.
The claims include those made by employee groups and the Pension Benefit Guaranty Corp., which have reached various agreements with the company but are expected to seek higher amounts by challenging specific points of the plan.
Also unsettled are $2.1 billion in claims against United filed by victims of the 2001 terrorist attacks.
___
On the Net:
