Creditors approve UAL Corp.’s reorganization plan
Chicago-based UAL Corp., parent company of United Airlines, said Dec. 30 that all of its creditors have approved its plan of reorganization submitted to the U.S. Bankruptcy Court for the Northern District of Illinois in September.
The reorganization plan includes UAL, United Airlines and 26 other subsidiaries that filed for voluntary Chapter 11 reorganization in December 2002.
UAL said that under the reorganization plan, unsecured creditors generally will receive distributions of new UAL common stock to settle their claims, while current holders of UAL common stock, preferred stock and the 13.25 percent Trust Originated Preferred Securities would receive no distribution, and those securities would be canceled upon the effective date of the plan.
UAL expects its common stock to be without value under the plan. The filing also contemplates a $2.5 billion, all-debt exit financing package.
“We are pleased to have received this support for our plan from our creditors. These results validate our efforts to develop an exit plan that is in the best interests of all of our stakeholders and maintains our strong momentum toward emerging from Chapter 11 in February,” said Glenn Tilton, United’s chairman, chief executive officer and president.