The U.S. Bankruptcy Court for the Northern District of Illinois has confirmed UAL Corporation’s Plan of Reorganization, setting the stage for United
to emerge from Chapter 11 in early February.In confirming the plan, the court determined that it provided fair and
equitable treatment of creditors and otherwise satisfied the requirements of
the Bankruptcy Code. The company’s creditors previously voted overwhelmingly
in support of the plan. Further, the Creditors’ Committee withdrew all
objections to the Plan, an important accomplishment as the company concludes
its very complex restructuring.
“The confirmation of our plan validates more than three years of work to
make United a sustainable enterprise, ready to compete successfully with the
strongest carriers,” said Glenn Tilton, United’s President, Chairman and CEO.
“The tremendous work of our employees during the most difficult times is an
indication of what we are capable of moving forward. We will build on our
momentum as we continue to differentiate United in the marketplace and focus
fully on our customers for a stronger future.”
“Throughout this process, we worked with our stakeholders to consensually
resolve issues and put forward a reorganization plan that maximizes the value
of United for all, and that provides a solid foundation on which United can
compete,” said Jake Brace, Executive Vice President and Chief Financial
Officer. “We appreciate the work of our Creditor’s Committee and all our
stakeholders for resolving issues cooperatively with us and now, with strong
relationships in place, look forward to working with our business partners
going forward for our mutual benefit.”
Pursuant to the confirmed plan of reorganization, current UAL common
stock, preferred stock and ToPRS will be canceled on the emergence date, and
no distribution will be made to holders of those securities.
The company said that creditor distributions would likely begin shortly
after its emergence.
As previously announced, United has secured $3 billion in exit financing
to be provided by JPMorgan, Citigroup and GE Capital. Exit financing will be
used by United to repay the Debtor-In-Possession (DIP) facility, to make other
payments required upon exit from bankruptcy, and to ensure strong cash
balances to conduct post-reorganization operations.
Both Standard & Poors and Moody’s credit ratings agencies have given
United’s business better ratings than any other network carrier.
On Wednesday, the company announced the composition of its Board of
Directors that will begin service upon United’s emergence from Chapter 11.