UAL's Union Leaders Report Bankruptcy Filing Is Imminent
Associated Press
CHICAGO -- The United Airlines board of directors held a special meeting Saturday as union leaders acknowledged that a Chapter 11 bankruptcy filing by the world's No. 2 carrier appeared imminent.
Airline spokesman Joe Hopkins said the meeting had recessed late Saturday afternoon and said there would be no more announcements. He did not comment further.
With the cash-strapped airline facing debt payments of $920 million in the next few days, union leaders had said on the eve of the board meeting that a bankruptcy filing was unavoidable.
UNITED'S BUMPY FLIGHT
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"It is ... with great disappointment that we are now certain a bankruptcy filing appears unavoidable and imminent," Randy Canale and Scotty Ford, leaders of the Machinists' union, told members in a letter posted on the union's Web site.
And CEO Glenn Tilton, after meeting with union officials, had said on a company hotline that Chapter 11 was becoming "a more likely outcome."
Mr. Tilton said United had arranged financing enabling it to continue flying during bankruptcy, but did not give details. The carrier was believed to have been seeking a $1.5 billion loan.
The board meeting came three days after the rejection of United's request for a $1.8 billion federal loan guarantee. The three-member Air Transportation Stabilization Board ruled that United's financial plans were unsound and that a loan guarantee would be too risky for taxpayers.
Following the board's action, shares in parent UAL Corp. fell 7 cents Friday to close at 93 cents a share on the New York Stock Exchange.
United, the world's largest airline until American overtook it last year, traces its problems to a drop in passengers because of the weak economy and the Sept. 11 terrorist attacks, an increase in competition from smaller discount airlines and failed business strategies.
United makes about 1,700 flights per day and has about 83,000 employees worldwide.
The imminent bankruptcy filing of UAL almost certainly will result in the utter vanishing of the 55% equity stake held by employees. Gone, too, almost certainly, will be the three labor seats on the 12-member UAL board.
Copyright (c) 2002 The Associated Press
Updated December 7, 2002 7:03 p.m. EST |
