UAL creditors committee asks court to delay disclosure statement vote; new plan to be filed

By Caroline Salls

Pittsburgh, Oct. 13 - UAL Corp.'s official committee of unsecured creditors requested the U.S. Bankruptcy Court delay a vote on the company's disclosure statement in light of open negotiations and the company plans to file an amended statement before the hearing date.

A hearing on the disclosure statement is currently scheduled for Oct. 20.

According to a Thursday filing with the U.S. Bankruptcy Court for the Northern District of Illinois, the issues still being negotiated by the committee and UAL include management and director equity plans, the scope and duration of trading restrictions on the stock of reorganized UAL and the allocation of the remainder of the 45% giveback from the Pension Benefit Guaranty Corp. settlement.

"At this point, the committee cannot endorse the plan, recommend a vote to accept the plan or support dissemination of the disclosure statement and plan without resolution and disclosure of the principal outstanding issues," the filing said.

Also Thursday, UAL's United Retired Pilots Benefit Association objected to the disclosure statement on the grounds that it does not provide enough information about the company's proposed substantive consolidation.

The association said the disclosure statement should describe how any lost qualified pension benefits of retired pilots may be recovered for their benefit by the Pension Benefit Guaranty Corp. without substantive consolidation, as compared to with substantive consolidation.

In addition, the association said the substantive consolidation section of the statement should reflect the possibility of the PBGC winning an appeal regarding a settlement agreement it reached with United, under which the PBGC waived its right to seek joint and several liability against the company.

If the appeals court rejects the settlement agreement, the PBGC's right to seek joint and several liability would be reinstated.

According to the objection, the statement should also reflect the proper division of distribution of new notes among retired pilots and active pilots should there be a loss of pension benefits.

UAL, the Chicago-based parent of United Airlines, filed for bankruptcy on Dec. 9, 2002. Its Chapter 11 case number is 02-48191.

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