Bidders may be allowed to make offers for United Airlines, thanks to last week’s ruling against United and its pilots’ union.
A chicago Federal Bankruptcy Court Judge, Eugene R. Wedoff ruled against a contract between United and its pilots’ union. Otherwise, United’s management would have been required to keep its right to draft a reorganization plan. The judge decided that the requirement would be “inappropriate.”
“Potential bidders for United, a unit of UAL, have been held at bay during United’s 25 months under protection because the management has maintained the exclusive right to file a reorganization plan. As long as that right remains in place, bidders cannot see the airline’s confidential financial data or make competing offers without the airline’s consent.
But if the judge lifted that right, called ‘exclusivity,’ other airlines or investment firms would be allowed to look at United’s books and propose their own plans.”
United Flight attendants who threatened to strike, reached an agreement with the the company over cutting labor costs.
“We have fought management every step of the way to ensure that this agreement would not provide a penny more from flight attendants than is legally necessary,” stated Greg Davidowitch, head of the flight attendants’ union.
“The reality from Day One is that United is going to survive only if it can negotiate successfully with all its workers,” said Douglas Baird, a University of Chicago bankruptcy law professor. “To the extent it’s on the path of doing that successfully, that’s good news.”
Murdok | Breaking eBusiness News
Your source for investigative ebusiness reporting and breaking news.
