Unions, PBGC Tapped for UAL Creditor Committee

December 16, 2002 (PLANSPONSOR.com) - The nation's private pension insurer and representatives for three major labor unions have been tapped for the creditor's committee of United Airlines' parent.

Late Friday, Chicago US Bankruptcy trustee Ira Bodenstein named 13 of United Airlines parent UAL Corp’s creditors to serve on a formal committee to help devise a financial recovery plan as part of its Chapter 11 reorganization.

Financial Sense

The Pension Benefit Guaranty Corporation (PBGC) was named as one of five representatives of financial companies.   That group also included the Bank of New York, which serves as trustee for some $1.84 billion in bonds, HSBC Bank USA, US National Bank Association, and R Squared Investments.

Additionally, United’s three major unions – the Association of Flight Attendants, the Air Line Pilots Association, and the International Association of Machinists – were named to the committee.

The creditors’ committee at United will have the power to oversee broad business decisions that United makes as it operates under bankruptcy protection.

Other Members

Airbus North America Holdings, Inc., a unit of French airplane manufacturer Airbus Industrie and United’s largest trade creditor, was named chairman on the committee on an interim basis.   Airbus also serves as chairman of the creditor’s committee in the US Airways bankruptcy case.   The pilots and machinists unions are also members of the US Airways committee.  

Engine maker Pratt & Whitney, Goodrich Corp., Galileo International Inc., and Deutsche Lufthansa AG were also named to the committee, which does not, and is not required to, include the firm’s largest creditors.   Generally the federal bankruptcy trustee attempts to choose a wide range of creditors that can represent the interests of both large and small debt holders.

Committee members were asked to select attorneys and financial advisers and will submit their choices for approval by Bankruptcy Judge Eugene Wedoff in the next few days.

«