FLYi Will Repay Debt with Bankruptcy Case Money

FLYi Inc., the owner of bankrupt Independence Air, plans to repay creditors with $103.4 million collected in the bankruptcy case of UAL Corp., parent of United Airlines.

FLYi, based in Dulles, Va., proposed splitting among creditors its proceeds from selling UAL stock in June and September. UAL exited bankruptcy in February and later gave FLYi 3.51 million shares to settle a $750 million debt.

"The largest asset of the debtors' estates available for creditors has been the debtors' stock in UAL Corp.," FLYi said in court papers filed Nov. 13 in Wilmington, Del. Bankruptcy Judge Mary F. Walrath is set to review the proposal at a hearing Friday. - Bloomberg News

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