UAL Hired Bankruptcy Lawyers After Attack
Fri Aug 2,10:43 AM ET
story.news.yahoo.com
CHICAGO (Reuters) - United Airlines parent UAL Corp. hired bankruptcy lawyers to advise it shortly after last September's hijack attacks that destroyed the World Trade Center and damaged the Pentagon ( news - web sites), an airline spokesman said on Friday.
Elk Grove Village, Illinois-based UAL has lost billions of dollars since the attacks as already-weak business travel eroded further. After reporting its latest quarterly loss in July, UAL said it was concerned about its ability to refinance debt due late this year if a request for federal loan guarantees is turned down.
Shares of UAL fell $1.07, or 20.5 percent, to $4.15 in early trading on Friday on the New York Stock Exchange ( news - web sites). The stock has eroded since the earnings announcement in July, reaching $3.49, by far the lowest since employees adopted a stock purchase plan in 1994.
UAL, the No. 2 U.S. air carrier behind AMR Corp.'s American Airlines, has asked the federal government to back nearly $2 billion in loans. Chief Financial Officer Jake Brace told analysts and reporters in July that United had tapped most of its sources of private financing.
Brace confirmed UAL's hiring of bankruptcy lawyers in an interview with BusinessWeek, although the magazine said the hiring was earlier in 2002.
UAL spokesman Joe Hopkins would not disclose what law firm UAL had retained, but said he believed the bankruptcy lawyers were still working for the company. UAL awaits the Air Transportation Stabilization Board's decision on its loan guarantee application.
"Our focus is two-fold," Hopkins said. "We are working with all of our employees to get our labor costs down and we are working with the ATSB for the loan guarantees." |
