What parts of UAL will end up with USAir?

[chipmunn]

Judge Denies UAL Attempt To Recover $388M In Tax Payments

CHICAGO (Dow Jones) - UAL Corp. withdrew a motion to force the government to hand over $388 million in tax payments after the judge overseeing its bankruptcy case here refused to go along with the airline's tactics for recovery.

Judge Eugene R. Wedoff said the automatic stay put into place at the start of the company's bankruptcy proceedings in December wasn't intended to be used as a means to compel payment.

Following Judge Wedoff's recommendation, UAL attorney Marc Kieselstein said the airline would withdraw its emergency motion and file a separate adversary proceeding. It's expected that the court would address that proceeding within the next week.

Late last week, UAL said in court documents that the Internal Revenue Service had been prepared to forward about $126 million in overpayments and a $262 million refund related to so-called net operating losses, but that the Department of Justice "improperly imposed" a freeze on the funds.

The government believes it has about $50 million in prepetition claims that would offset the money payable to the company, a figure UAL "vigorously disputes," according to court documents.

In court testimony, UAL attorney Kieselstein said that without any recovery of the tax payments, the company's cash balances would become inadequate. UAL's utilities and credit-card partners may come back to court seeking special amendments and assurances, he said.

"We're talking about a potential run on the bank," he said. "The company needs the money literally to operate."

 

[RowUnderDCA]

they shoot horses, don't they? metaphorically, speaking, of course.

 

[whatkindoffreshhell]

[blockquote]
----------------
On 2/27/2003 8:25:20 PM LavMan wrote:

PIT, we at the IAM have the Day of Action to march on Capitol Hill and we will be inviting all transporation unions to join us on the hill, at the time of the march and rally, we will have members in their respective legislators offices and tell them to look out the window, and tell them those people vote!
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[/blockquote]

LavMan reveals his true cause! Yeah, go march on Capitol Hill, maybe you'll bump into some of those camped-out steelworkers in pup tents who thought if they just chant "let's make steel" then everyone would understand their cause and offer support.

You are doing a dis-service to your members by blaming the government and management. Why do the words "union-busting" roll so easily off your lips? Certainly you are capable of learning new things.

The market is not buying your product at the price you are demanding. Nothing sinister about it, just reality.

Don't believe me? Go ask the folks at Polaroid Company.

 

[a320av8r]

Its not my fault, I voted Democrat.

 

[chipmunn]

UAL: Ruling Permits More ESOP Share Sales

CHICAGO (Reuters) - UAL Corp., parent of bankrupt United Airlines, said on Tuesday the U.S. Internal Revenue Service has ruled that the trustee of its employee stock ownership plan can sell additional shares without jeopardizing special tax benefits.

Such a step that could lower employee ownership below the 20 percent mark, triggering "sunset" provisions that could alter the make-up of the company's board of directors and affect voting powers.

UAL said the "sunset" changes could occur in the next few weeks, depending on the size and timing of the share sales.

The IRS ruling allows the trustee, State Street Bank and Trust, to sell 3.9 million more shares of UAL stock held in the ESOP without jeopardizing special tax benefits related to the airline's net operating losses.

U.S. Bankruptcy Judge Eugene Wedoff ruled two weeks ago that State Street could not sell any more shares in the plan because the company's tax benefit was more important that shareholder value, which State Street argued it was trying to protect.

P.S. - The March 3 Airline News update has been posted at www.chipsplace.com under Rumor Control.

 

[chipmunn]

UAL/IRS/Stock Plan: Sunset Provisions Occur Below 20%

CHICAGO (Dow Jones) - UAL, parent of United Airlines, said that State Street Bank, a unit of State Street Corp., could trigger so-called "sunset" provisions that affect UAL's corporate governance if the plan's stake drops to below 20%.

If that occurs, the move would eliminate the 55% shareholder voting power held by the stock plan and could result in changes to board seats. In addition, UAL said that the sunset provision would eliminate a special board, board committee and shareholder votes for moves like acquisitions, divestitures and chief executive appointments.

Once State Street sells the added 3.9 million shares, the employees will hold stock convertible into about 16 million common shares.

In its decision, the IRS ruled that certain stock sales by 401k plans managed by Fidelity Management Trust Co. and by an undisclosed mutual fund that previously held a large UAL stake didn't need to be included in ownership change for the purposes of maintaining UAL's net operating loss.

UAL noted that an order issued by the U.S. Bankruptcy Court for the Northern District of Illinois that prevents certain parties from buying or selling UAL common shares or purchasing debt claims against the company remains in effect. Chicago-based UAL said those affected by the order include holders of more than 4.8 million common shares on an as-converted basis and holders of claims of $200 million or more against UAL companies.

Last month, the judge overseeing UAL's bankruptcy case ruled that State Street couldn't sell its remaining UAL shares, preserving potentially billions of dollars in future tax benefits for the beleaguered airline.

In December, UAL said in court documents and proceedings that such stock sales would trigger an ownership change that ultimately would have prevented the airline from spreading net operating losses over several years' worth of future tax returns. UAL expects total net operating losses between $3.1 billion and $ 4.3 billion.

The company said in court at the time that it expected to post pretax earnings of $1 billion in 2004, $1.9 billion in 2005, $2 billion in 2006 and $2.1 billion in 2007.

State Street attorneys argued that the trustee need to act quickly to retain the value of its investment, noting that the stocks of other companies in bankruptcy have a trend of falling in the weeks after the initial petition.

The employee stock ownership plan, created in 1994 and now with about 75,000 members, held about 55% of UAL's shares until September when State Street began selling off its stake.

 

[chipmunn]

Food for thought:

About a week ago Greg Taylor, UA senioor vice president of planning, told the bankruptcy court the creditors committee wants UA to divest itself of the IAD, DEN, & LAX hubs, along with the Pacific operation.

Cranis business News reported on March 2 that UA will assign its entire A320 family fleet of 133 aircraft to its new Starfish LCC operation.

UA ALPA MEC Chairman Paul Whiteford has said those employees placed at Starfish must resign their UA seniority and this division could be "spun off".

Today UA announced it had reached agreement for the sale of 3.9 million shares of UA ESOP stock, which will likely trigger a sunset provision that would eliminate a special board, board committee and shareholder votes for moves like acquisitions and divestitures.

The UA unions are trying to find an outside investor like David Bonderman, Marvin Davis, or George Soros to provide an alternate takeover plan.

David Bronner told Ted Reed of the CLT Observer and Tom Olsen of the PIT Tribune-Review that he is interested to buy UA assets for US.

Will it occur? Who knows, but the tea leaves may be pointing in that direction, provided US can emerge from bankruptcy in less than four weeks.

Chip

 

[diogenes]

[blockquote]
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On 2/27/2003 446 PM PineyBob wrote:

I have never felt that the company engaged in "union busting". To me "Union Busting" is when a company takes actions to disrupt the formation, operation and solication of membership in union activities.

Union Busting in the case of US Airways is "Collateral Damage" in US's quest to remain in business. I never believed and still don't that it was ever the primary intent of the company to "break" the union. Now powerful economic forces and the activities of 9/ll are at play and the end result will be that the backs of some of the most powerful unions in the world will if not broken be badly bent.
----------------
[/blockquote]
-------------------------------------------

Hello, Piney Bob,

Formally, of course, you are correct with the definition of 'union busting.' I'd go so far as to agree 'the unpleasant intercoursing of the unions' was not the sole motivation of U management. Indeed, a new paradigm, revenue-wise. But I can assure you from up-close and personal dealings, this company LOVES to screw over the unions. I mean, when agents went union in 95, the sonsab***hes 'took it personal.' Apparently, management failed to take responsibility for creating an environment conducive to organization.

PITbull is right on the larger point. Management is taking advantage of the economic and political environment to bust the unions - and no less than a former U CEO said so. Dues are being depleted because of layoffs and lower wage structures. This lessens our political effectiveness and educational outreach. Meanwhile, the revenue-battered airlines (who poor-mouthed Congress post 9/11 and received a substantial chunk of your tax $$'s) can afford a high dollar lobbying firm to revisit the RLA.

As Woodward and Bernstein said, ..."follow the money."

You're aware, from past posts, I certainly have issues with the unions and with the Dems. But I can't wait for perfection, I've got to work NOW with the best tools, however imperfect they may be, I can get my hands on.

Lastly, to secure the long-term survival of U, what scintillating move has management made NOT on the backs of labor?

JM2c

 

[PITbull]

[blockquote]
----------------
On 3/4/2003 7:02:05 PM diogenes wrote:

[blockquote]
----------------
On 2/27/2003 446 PM PineyBob wrote:

I have never felt that the company engaged in "union busting". To me "Union Busting" is when a company takes actions to disrupt the formation, operation and solication of membership in union activities.

Union Busting in the case of US Airways is "Collateral Damage" in US's quest to remain in business. I never believed and still don't that it was ever the primary intent of the company to "break" the union. Now powerful economic forces and the activities of 9/ll are at play and the end result will be that the backs of some of the most powerful unions in the world will if not broken be badly bent.
----------------
[/blockquote]
-------------------------------------------

Hello, Piney Bob,

Formally, of course, you are correct with the definition of 'union busting.' I'd go so far as to agree 'the unpleasant intercoursing of the unions' was not the sole motivation of U management. Indeed, a new paradigm, revenue-wise. But I can assure you from up-close and personal dealings, this company LOVES to screw over the unions. I mean, when agents went union in 95, the sonsab***hes 'took it personal.' Apparently, management failed to take responsibility for creating an environment conducive to organization.

PITbull is right on the larger point. Management is taking advantage of the economic and political environment to bust the unions - and no less than a former U CEO said so. Dues are being depleted because of layoffs and lower wage structures. This lessens our political effectiveness and educational outreach. Meanwhile, the revenue-battered airlines (who poor-mouthed Congress post 9/11 and received a substantial chunk of your tax $$'s) can afford a high dollar lobbying firm to revisit the RLA.

As Woodward and Bernstein said, ..."follow the money."

You're aware, from past posts, I certainly have issues with the unions and with the Dems. But I can't wait for perfection, I've got to work NOW with the best tools, however imperfect they may be, I can get my hands on.

Lastly, to secure the long-term survival of U, what scintillating move has management made NOT on the backs of labor?

JM2c
----------------
[/blockquote]

Dio,

You had ME at "Hello".

 

[PITbull]

[blockquote]
----------------
On 2/27/2003 4:53:12 PM savyinvestor wrote:

[blockquote]
----------------
On 2/27/2003 446 PM PineyBob wrote:

I have never felt that the company engaged in "union busting". To me "Union Busting" is when a company takes actions to disrupt the formation, operation and solication of membership in union activities.

Union Busting in the case of US Airways is "Collateral Damage" in US's quest to remain in business. I never believed and still don't that it was ever the primary intent of the company to "break" the union. Now powerful economic forces and the activities of 9/ll are at play and the end result will be that the backs of some of the most powerful unions in the world will if not broken be badly bent.
----------------
[/blockquote]
Bob, I couldn't agree with you more. If there was a more powerful union than ALPA I am not aware of it. So few in number could disrupt and intimidate an entire airline. Look at their givebacks and pension. These were negotiated from a position of power and as some would suggest at the expense of their fellow employees. Hopefully those days are over so no company can be held hostage by so few. Savy
----------------
[/blockquote]

Savy,

Make no mistake, NO union was in a "position of power", especially ALPA. When the co. threatened BK first in the summer and then in the winter, Liquidation as their "trump", ALPA had the MOST to lose with those threats. In fact who had the LEAST to lose was AFA and CWA; in that order. Your vote reflected your "fear" of what you potentially could lose.

Winter concessions vote "failed" in PIT base for AFA out of 6 bases, and "passed" by a very slim margin in PHL (biggest base for f/as. As for CWA, collective vote "passed" by only 5 votes.

 

[batman]

[blockquote]
----------------
On 3/4/2003 12:38:51 AM chipmunn wrote:


"We're talking about a potential run on the bank," he said. "The company needs the money literally to operate."
----------------
[/blockquote]


United Airlines Ends January with $1.78 Billion in Cash


Mar 05, 2003 (Chicago Tribune - Knight Ridder/Tribune Business News via COMTEX)
-- United Airlines lost $382 million in January, but its remaining pile of cash
barely declined thanks to drastically reduced employee wages.

The Elk Grove Township-based carrier ended January with $1.78 billion in cash,
down less than 2 percent from $1.81 billion on Jan. 1. That's good news for the
nation's second largest airline, which filed for federal bankruptcy protection
from creditors in December.

After the filing, United's pilots, flight attendants and salaried employees
agreed to temporary wage cuts to help the carrier through the immediate crisis.
A bankruptcy court judge later imposed similar cuts on United's mechanics.

Separately, some good news for United from the Internal Revenue Service may be
bad news for the company's employee owners.

....
By Susan Chandler

 

[michael707767]

[blockquote]
----------------
On 3/4/2003 5:39:25 PM chipmunn wrote:

David Bronner told Ted Reed of the CLT Observer and Tom Olsen of the PIT Tribune-Review that he is interested to buy UA assets for US.

Will it occur? Who knows, but the tea leaves may be pointing in that direction, provided US can emerge from bankruptcy in less than four weeks.

Chip
----------------
[/blockquote]


Chip,
my tea leaves tell me this. UAL will divest of some assets, they will have to in order to survive. US may end up with some airplanes and maybe the IAD hub, but the financing may be difficult to obtain. Delta will buy the pacific routes.
Michael

 

[ual727fo]

If you folks end up with any of our assets I sure hope you choke on them. P.S. This thread is really low class. I guess thats just the kind of people you are though.

 

[oldiebutgoody]

[blockquote]
----------------
On 3/5/2003 2:27:58 PM ual727fo wrote:

If you folks end up with any of our assets I sure hope you choke on them. P.S. This thread is really low class. I guess thats just the kind of people you are though.
----------------
[/blockquote]
Hey *deleted my moderator*,
The person that started this thread isn't even a US Airways employee, but a customer. If U does wind up with some of UAL, be happy to have a job, because it will likely be at the expense of over 1800 U pilots and many more from other groups that are presently furloughed. I, for one, think that entire industry might be better off if UAL just shriveled up and died, and it looks like it's headed in that direction. The difference is, the US congress will likely come to your rescue. They did just about everything they could to derail U so far.

 

[Diesel8]

[blockquote]
----------------
On 3/5/2003 3:09:46 PM oldiebutgoody wrote:

I, for one, think that entire industry might be better off if UAL just shriveled up and died, and it looks like it's headed in that direction. The difference is, the US congress will likely come to your rescue. They did just about everything they could to derail U so far.
[blockquote]
----------------

Funny, that is what a lot of people were thinking about U, hoping it would just disappear. The goverment, however misguided, appear to have other plans for U, considering they very early on gave U a conditional loan guarantee. Even more surprising, considering U did not meet revenue projections and has yet to deal with the pilot pension shortfall.