The City and County of Denver and United Airlines have reached a settlement over $21.6 million in outstanding property tax obligations that were frozen once the airline filed for bankruptcy protection in 2002.
The settlement was announced today. United will pay Denver $20.6 million, including $9.1 million for its 2002 property taxes, and $12.5 million in outstanding sales, use and occupational privilege taxes.
Denver will net $15.9 million after forwarding $92,000 in property taxes to the Urban Drainage and Flood Control District, and $5.6 million in property taxes to Denver Public Schools. DPS will use $4.7 million of that to repay money it was advanced by the State of Colorado after United’s bankruptcy was announced. The remaining $900,000 will be sent to DPS’ bond funds.
Denver will use the settlement monies to replace $12.6 million used to balance its fiscal 2006 budget and to prepare for the fiscal 2007 budget cycle.
By reaching the deal, both parties were able to avoid objections that had the potential to impact United’s bankruptcy recovery. The airline has filed plans to exit bankruptcy by February, 2006.
