Chicago – United Airlines’ reorganization plan was approved today after three tumultuous years in Chapter 11, paving the way for the airline to emerge from bankruptcy in early February.
“If there’s not a feeling of exaltation in this room, perhaps there can be a feeling of relief,” U.S. Bankruptcy Court Judge Eugene Wedoff told people in his courtroom this morning.
“Certainly not everyone can be completely happy,” Wedoff said. United’s stock will be cancelled and employees have lost jobs and taken concessions.
But, he noted, three years ago United was “in danger of dying.” Today “it has the potential to be a profitable investment, a reliable business partner and a stable employer… The bankruptcy system merely provided the framework.”
The outcome is the result of the “hard work, creative thinking, willingness to compromise and willingness to accept a less than ideal result” of all parties involved.
“Life does not always give us the outcomes we expect,” he said.
Wedoff said he has been asked by couples to preside over weddings. At first that seemed, since his specialties is bankruptcy, not matrimony. Now he sees wisdom in their choice.
“With its emphasis on cooperative effort to find the best solution to the resulting problems, (bankruptcy) is an entirely appropriate way to set out on a new beginning,” he said.
United will now have a 10-day waiting period, during which time appeals can be filed and banks providing $3 billion in exit financing can weigh whether any such appeals would affect their decision to fund the exit.
In a message to employees today, chief executive Glenn Tilton thanked them for their hard work and said competitors are “likely concerned.”
The good news for United is that it is emerging as airfares are rising, which could bring in more revenue, said airline consultant Darryl Jenkins. But, “they’re also coming out at a time when jet fuel is pretty darn expensive, so they’ve got some real challenges ahead.
“I hope they spend all of their time trying to be a world class airline again and don’t spend all of their time thinking about mergers, which they’ve done once before,” Jenkins said.
United’s attempt to merge with US Airways failed in 2001 after antitrust regulators raised concerns.
United will announce shortly where it will list its stock, saying it has been approved by both the NASDAQ and the New York Stock Exchange. United’s chief financial officer Brace said United expects to exit and be trading very early in February.
“We are happy,” Brace said. The bankruptcy process took longer than expected and “was every bit as difficult as we expected it to be, and then some.”
Staff writer Kelly Yamanouchi can be reached at 303-820-1488 or kyamanouchi@denverpost.com.
