The U.S. Supreme Court on Monday refused to hear an appeal involving United Airlines' lease at San Francisco International Airport that was tied to $155 million of bonds sold on behalf of the airline.
The high court's decision moves determination of how much of the debt the airline will pay back to a U.S. Bankruptcy Court in Chicago.
Had the U.S. Supreme Court taken up the appeal and ultimately sided with bondholders in determining an airport lease was linked to the bonds, bondholders would have been in a stronger position to get paid, said Peter Stettler, a rating analyst at Fitch Ratings.
A trial was scheduled on April 25 to find whether there was any security value backing the special facility revenue bonds, or if the bonds were an unsecured credit, said Jean Medina, a United spokeswoman.
If it is determined the bonds were unsecured debt, United would be expected to make payments of only pennies on the dollar in the form of stock from the reorganized airline.
Medina added that the airline, which filed the original lawsuit challenging the lease at the San Francisco airport, believed the bonds were unsecured.
Reuters
The high court's decision moves determination of how much of the debt the airline will pay back to a U.S. Bankruptcy Court in Chicago.
Had the U.S. Supreme Court taken up the appeal and ultimately sided with bondholders in determining an airport lease was linked to the bonds, bondholders would have been in a stronger position to get paid, said Peter Stettler, a rating analyst at Fitch Ratings.
A trial was scheduled on April 25 to find whether there was any security value backing the special facility revenue bonds, or if the bonds were an unsecured credit, said Jean Medina, a United spokeswoman.
If it is determined the bonds were unsecured debt, United would be expected to make payments of only pennies on the dollar in the form of stock from the reorganized airline.
Medina added that the airline, which filed the original lawsuit challenging the lease at the San Francisco airport, believed the bonds were unsecured.
Reuters
