Source: Associated Press
Author: Mike Colias 

United Plans to File Reorganization Plan Next Month, Will Detail Future Business Model

CHICAGO (AP) -- United Airlines on Friday said next month it will submit its formal plan to exit bankruptcy sometime this fall.

In a court filing, the airline's parent company, Elk Grove Village, Ill.-based UAL Corp., detailed its timeline for filing the documents that will form the blueprint for its emergence from 2 1/2 years of Chapter 11 bankruptcy protection.

United said it plans to submit around Aug. 1 two key documents that will spell out how it will settle claims with lenders and other parties and detail its future business model.

"Today's filing represents perhaps the most significant step forward in our restructuring," United CEO Glenn Tilton said in a statement.

"There is still much work to do and this is an aggressive schedule, but one that is achievable," Tilton told employees in a recorded message.

UAL asked in Friday's filing for the bankruptcy court to schedule a hearing in early September to approve a disclosure statement, which will detail United's current business and sketch out its future financial model.

The bankruptcy court, along with United's lenders, unsecured creditors, stockholders and others, must approve any reorganization plan before the carrier exits bankruptcy, United said.

Separately, United's flight attendants are threatening to strike after the carrier on Thursday formally turned over their pension plan to the Pension Benefit Guaranty Corp., the federal agency that insures pension plans. A bankruptcy judge in May approved United's plan to unload all four of its plans on the PBGC.

The Association of Flight Attendants said the termination violates its labor contract and triggered its legal right to strike. On Thursday, it threatened to stage random, unannounced strikes.

"We will implement CHAOS strikes in a way that has the greatest impact on United management and the least risk to flight attendants," AFA spokeswoman Sara Nelson Dela Cruz said. CHAOS stands for Create Havoc Around Our System.

"It's absurd that the AFA leadership believes they get to opt out and be treated differently," United said in a statement Friday. "It is unfair to other employees (and) completely ignores our financial straits."

The company also said it believes a strike would be illegal under federal bankruptcy law and the Railway Labor Act.