US Airways gets OK to take competing bids to merger, decide best plan funding proposal

By Caroline Salls

Pittsburgh, June 1 - US Airways, Inc. obtained approval of its plan funding procedures that will allow it to consider competing funding procedures or ultimately move forward with its merger agreement with America West Holdings Corp., according to a Tuesday filing with the U.S. Bankruptcy Court for the Eastern District of Virginia.

According to the order, competing funding proposals can be submitted for 30 days with a $25 million deposit.

If no competing plans are filed, US Airways will file a plan of reorganization that incorporates the merger agreement with America West.

If qualified competing plans are filed, US Airways will review the competing plans or hold an auction to decide whether the qualified competing plan or the merger is the best proposal.

A hearing on approval of the "best" proposal is scheduled for July 7. After that, the approved best proposal will be incorporated into US Airways' plan of reorganization.

In his order, judge Steven S. Miller said he believes the merger agreement is in the best interest of the creditors and estates of the company.

"[US Airways is] receiving fair and reasonably equivalent value in exchange for the payments and commitments that may be made to America West and/or the plan investors," the order said.

US Airways, an Arlington, Va.-based carrier, filed for bankruptcy on Sept. 12. Its Chapter 11 case number is 04-13819.

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