UAL disclosure statement approved; plan confirmation hearing set for Jan. 18

By Caroline Salls

Pittsburgh, Oct. 20 - UAL Corp.'s disclosure statement for its plan of reorganization was approved Thursday by the U.S. Bankruptcy Court for the Northern District of Illinois, according to a status report filed with the court.

A hearing on confirmation of the plan of reorganization is scheduled for Jan. 18. The company said it expects to submit a revised disclosure statement and solicitation procedures order to the court before Friday's scheduled omnibus hearing.

Under the plan, the company will issue 125 million shares of new common stock to be distributed to unsecured creditors.

Treatment of creditors under the plan will include:

* Holders of debtor-in-possession claims will receive 100% recovery in cash;

* Holders of secured aircraft claims will receive 100% recovery in reinstatement of their claims or return of collateral;

* Holders of other secured claims will receive 100% recovery in cash or the return of collateral;

* Holders of $20 billion to $30 billion in unsecured claims will receive 4% to 7% recovery in new common stock in the reorganized company;

* Holders of old equity interests, including common stock, preferred stock and 13.25% Trust Originated Preferred Securities will receive no distribution.

The plan will be funded by up to $3 billion in exit financing from JPMorgan Chase Bank, NA and CiticorpUSA, Inc., the status report said.

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

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