CHICAGO (AP) -- A federal bankruptcy judge on Friday agreed to give United Airlines two more months to submit a reorganization plan without competition from outside investors, despite objections from some creditors.
Bankruptcy Judge Eugene Wedoff said the extension of exclusivity ''would improve rather than detract from the potential for a successful reorganization'' of the nation's No. 2 airline, which has been in Chapter 11 bankruptcy for 2 1/2 years.
Attorneys for two banks that hold more than $2 billion in United debt said opening the process to competing proposals would not delay the company's exit from bankruptcy.
''The prospect of competing plans is one of the best ways to maximize the estate,'' said Katherine Constantine, an attorney for U.S. National Bank Association. The Bank of New York and the Association of Flight Attendants also opposed giving more time to United, a unit of Elk Grove Village, Ill.-based UAL Corp.
Wedoff acknowledged that the bankruptcy has dragged on longer than expected and said he hopes United will file its reorganization plan before the new Sept. 1 deadline.
United Chief Financial Officer Jake Brace declined to say whether the company would submit a plan by then but said he still anticipates United exiting bankruptcy sometime this fall.
Before Friday's hearing, United and its machinists' union reached a tentative contract agreement, formalizing a preliminary pact reached May 31 that averted a strike threat.
Members of the International Association of Machinists and Aerospace Workers, which represents 20,000 baggage handlers, customer service representatives and other ground workers, have a July 22 deadline to vote on the five-year contract.
Terms of the contract were not disclosed. The sides previously said their agreement would save United $175 million annually in wage and benefit cuts.
The IAM said Friday the deal calls for contributions to a replacement pension fund for current employees to be steered into the IAM's National Pension Plan rather than a company 401(k). The issue had been a major sticking point in negotiations.
If approved, the IAM would become the last of United's labor groups to agree to additional concessions that would save United $700 million annually.
However, the flight attendants' contract, ratified in January, has been in arbitration since April, when the union accused United executives of failing to cut their own salaries along with those of workers as agreed _ something United denies.
The AFA also has appealed to U.S. District Court a May 10 decision by Wedoff to allow United to turn over its employee pension plans to the Pension Benefit Guaranty Corp., the federal government's pension insurer. AFA officials have threatened to strike if the PBGC terminates the group's pension.
If approved, UAL Corp.'s United will have the final victory in a seven-month effort to rewrite its union contracts to save an additional $700 million (euro575 million) annually - a step the carrier...
United Airlines' plan to eliminate its employees' defined-benefit pension plans moved a step closer to reality when the government's pension-protection agency agreed to drop its opposition.