Creditors of United Airlines have until today to cast their votes to accept or reject the company’s plan of reorganization, which could let the carrier depart bankruptcy as early as February.
United’s plan would grant unsecured creditors 4 to 8 cents on the dollar for their claims, generally in the form of new common stock of the airline’s parent, UAL Corp.
The 90,000 creditors eligible to vote, including 3,500 in Colorado, include travel agencies with claims for unpaid invoices or unpaid taxes, for example. Other eligible creditors are individuals, such as some retired employees who have claims for benefits.
Those who don’t vote are deemed to have accepted the plan.
The plan of reorganization passes if holders of at least two-thirds of the dollar amount and more than half in number vote to accept it. That would trigger a hearing on confirmation of the plan in bankruptcy court, scheduled for Jan. 18.
Jim Hoyhtya, a 63-year old retired United pilot who got a ballot to vote, said he voted to reject the plan because “I just don’t feel that it was fair just to cut the pensions out.”
The United Retired Pilots Benefit Protection Association recommended a vote to reject the plan, in part because many retired pilots experience significant losses in their pension income under United’s plan.
Hoyhtya said he thinks chances are slim that the plan won’t be approved, “but we have to do what we have to do.”
Steven Silvern, a lawyer whose Silvern Law Offices has a claim of more than $250,000, said he also voted against the plan because some creditors “are getting such a terrible result while executives of United … are apparently being enriched.”
United’s proposed management equity incentive plan and director equity incentive plan is valued at $285 million to $525 million, depending on the value placed on the company’s stock, according to an objection filed by the International Association of Machinists and Aerospace Workers.
Silvern’s claim stems from an award from a lawsuit, case expenses and attorney’s fees.
Retired United pilot Jim Krasno said he also is voting against the plan because accepting it would mean accepting all terms. He said the plan would disallow the retired pilots association from suing third parties.
Not all creditors are eligible to vote. Creditors that would be paid in full for their claims under the plan are generally not entitled to vote because they are automatically deemed to accept the plan. Creditors that would get nothing for their claims are not entitled to vote because they are automatically deemed to reject the plan.
Staff writer Kelly Yamanouchi can be reached at 303-820-1488 or kyamanouchi@denverpost.com.
