United Says Objections to Disclosure are Resolved

October 21, 2005 (PLANSPONSOR.com) - United Airlines has told a bankruptcy judge that objections from creditors and the Pension Benefit Guaranty Corporation (PBGC) to its disclosure statement have been resolved.

The Associated Press reports that objections by the PBGC and others had threatened to complicate United’s plan for emerging from bankruptcy in February after a three-year restructuring.   The PBGC had dropped its objections in exchange for up to $1.5 billion in notes and convertible stock in a reorganized UAL Corp, but last week threatened resistance again because the recently released disclosure plan put onerous restrictions on its ability to sell that stock and would breach the agreement (See  PBGC Has Issues with UAL Exit Plan ).

United spokeswoman Jean Medina said the company made changes to its disclosure statement this week that settled 17 of the complaints, including those of the creditors committee and the PBGC.   She said the settlements will not add to the cost of the company’s reorganization.

PBGC spokesman,Jeffrey Speicher, warned that the company may not be in the clear, though.   “The company amended its disclosure statement consistent with the agency’s objection, so we withdrew the objection,” he said. “But we reserve the right to object if agreement on the underlying issue is not reached.”

On a separate note, United amended its reorganization plan so that unsecured creditors would get 4 to 8 cents on the dollar for their claims instead of 4 to 7 cents.