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United Airlines Is Near Bankruptcy's Exit Door

January 19, 2006|From Associated Press

United Airlines moved to the brink Wednesday of getting a final go-ahead to leave bankruptcy protection, winning court approval for its controversial management stock plan and resolving differences with its combative flight attendants' union.

With all remaining objections to the plan settled or overruled at a daylong confirmation hearing, U.S. Bankruptcy Judge Eugene Wedoff said he expected to sign off on the company's reorganization plan Friday.

The all-but-certain approval prompted a round of congratulatory handshakes among United attorneys and officials in U.S. Bankruptcy Court on Wednesday evening.

"We did everything that we set out to do," Jake Brace, United's chief financial officer, told reporters after the hearing. "We have to wait a couple of days to get the final order we need."

The anticipated ruling Friday, barring last-minute glitches, will remove the final obstacle to the targeted Feb. 1 exit from bankruptcy for United and parent UAL Corp. after a more than three-year restructuring.

All that remains then, Brace said, is to finish United's financing process and get the money from its lenders.

The confirmation hearing represented a last chance for unions and others to air their protests and was scheduled to last as long as three days. But the Elk Grove Village, Ill.-based company sailed through the proceedings in about six hours of courtroom time, despite expectations of a showdown over the stock plan.

Under that plan, 400 management executives stand to receive 8% of the shares that the company intends to issue upon its emergence from bankruptcy -- valued at about $152 million. The stock comes on top of annual salaries that will total $3.5 million for the top eight UAL executives.

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