United Expects Friday To Be The Day

[FlyUnited]

United Airlines Is Near Bankruptcy's Exit Door
From Associated Press


United Airlines moved to the brink Wednesday of getting a final go-ahead to leave bankruptcy protection, winning court approval for its controversial management stock plan and resolving differences with its combative flight attendants' union.

With all remaining objections to the plan settled or overruled at a daylong confirmation hearing, U.S. Bankruptcy Judge Eugene Wedoff said he expected to sign off on the company's reorganization plan Friday.

The all-but-certain approval prompted a round of congratulatory handshakes among United attorneys and officials in U.S. Bankruptcy Court on Wednesday evening.

"We did everything that we set out to do," Jake Brace, United's chief financial officer, told reporters after the hearing. "We have to wait a couple of days to get the final order we need."

The anticipated ruling Friday, barring last-minute glitches, will remove the final obstacle to the targeted Feb. 1 exit from bankruptcy for United and parent UAL Corp. after a more than three-year restructuring.

All that remains then, Brace said, is to finish United's financing process and get the money from its lenders.

The confirmation hearing represented a last chance for unions and others to air their protests and was scheduled to last as long as three days. But the Elk Grove Village, Ill.-based company sailed through the proceedings in about six hours of courtroom time, despite expectations of a showdown over the stock plan.

Under that plan, 400 management executives stand to receive 8% of the shares that the company intends to issue upon its emergence from bankruptcy — valued at about $152 million. The stock comes on top of annual salaries that will total $3.5 million for the top eight UAL executives.

 

[Doug Parker]

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I'll believe it when I see it................................





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[SWA GUY]

Under that plan, 400 management executives stand to receive 8% of the shares that the company intends to issue upon its emergence from bankruptcy — valued at about $152 million.

Geez.....that would be about one management executive per jet. Is this right, or has the press blow it out their @ss again?

 

[FN FAL]

Could be interesting, is this the calm before the storm?

 

[koko nw]

Under that plan, 400 management executives stand to receive 8% of the shares that the company intends to issue upon its emergence from bankruptcy — valued at about $152 million.

Geez.....that would be about one management executive per jet. Is this right, or has the press blow it out their @ss again?

You are correct sir It's a disgusting example of what's wrong at UAL. All the talk of "shared" sacrifices and "working" together pretty much got flush down the ole toilet there with this "money grab", remember they initially wanted 15%, they thought they did such a great job!

Ya think we can borrow old herb for little bit, we promise to give em back

Sad

 

[JetMonkey]

If this doesen't pan out those idiots upstairs in their offices will have no one to blame but themselves....God knows the whole world and their mother gave those clowns every possible extension after extension, credit, forgaveance, pension cancelation, etc..., imaginable. All I have to say is good luck to everyone.

 

[FlyUnited]

Nice to see them emerge, intact, and still possessing their superior route structure. Sounds like this board has some jealous pilots who hoped United would fail so their carrier could possibly cash in on some of these routes.

Regardless of how much management took, it still beats starting over and worse, never getting the chance again. Way to go United!!

 

[32LT10]

Thanks

flyunited.

Thanks for the kind words. It is a shame that the others here do not understand the lengths we have gone to emerge from BK. Two years of waiting for ATSB loans that were rejected in no small part due to lobbying by the other carriers. UA has overcome the odds to find itself on the threshold of BK exit. This does not mean the work is over and we can all celebrate this milestone. What it does mean is that we have survived the near death experience and that we are now put to the test to perform. Our route structure and business plan are different than the others for the most part. (see WSJ article from last Firday). UA is keeping amenities, keeping the economy plus and using RJ's with better configurations than the competition. (as a UA pilot I am well aware of the issues involving RJ's but they are the better evil than the competitions airplanes)

To those that wished us ill I suspect this is not the news you wanted to hear. To those that wanted to carve us up. Well put the knives away for now. What the future holds nobody knows. However, during the stay in BK we heard many times from the DL, NW and SW pilots about how we were going to fail and their respective carriers were to take over the remains. As Lee Corso would say, "Not so fast my friend!" With the exception of SWA the future of the other carriers does not look so rosey. Tilton said recently that when we entered BK he had a cash offer for the Pacific routes from one of the carriers currently in BK that is based in GA. His wisdom of knowing what is core to the company helped steer us out of BK and helped put the others in.

 

[hmmurdock]

You are correct sir It's a disgusting example of what's wrong at UAL. All the talk of "shared" sacrifices and "working" together pretty much got flush down the ole toilet there with this "money grab", remember they initially wanted 15%, they thought they did such a great job!

Ya think we can borrow old herb for little bit, we promise to give em back

Sad

Greetings...I can't for the life of me understand how a person could except these bonuses with a clear conscience. I would think that they would want to do the right thing to help make United even stronger and maybe bypass these bonuses. They make enough money as it is.

Take care

 

[Andy]

Greetings...I can't for the life of me understand how a person could except these bonuses with a clear conscience. I would think that they would want to do the right thing to help make United even stronger and maybe bypass these bonuses. They make enough money as it is.

Take care

I'm still a furloughed UAL pilot, but the management team that I will return to work for is far different than the one that was 'in charge' when I left.
Even I gave UAL up for dead back in 2003; many on this board were openly discussing acquisition of UAL's assets and which piece they'd like to see their company get.

On a relative level, Tilton has been grossly underpaid. I don't remember his exact salary, but it's not much more than Duane Woerth's; I think that UAL got a MUCH better bargain than ALPA. It was expected that Tilton's stock options, vested fover the next 4 years, would be worth $15 million. 20% of the pilots at UAL sold their rights to UAL stock for three times expected value, hence the new evaluation of how much this stock package is worth (it was supposed to be just under $200M).
As for the rest of UAL's management team, Tilton has quietly done house cleaning. At one point, there were VPs leaving for 'personal reasons/other opportunities' on a regular basis. I for one would like to thank ATA for allowing us to get John Tague. He and Tilton are worth every freaking penny they'll be getting out of this.

I will be back at UAL before the end of this year. I look forward to helping UAL put the hurt on a few airlines that did us quite a bit of damage post-911. Off the top of my head, there's one that flies around with animals on their tails which did a huge expansion following 911 which coincided with UAL's drawdown in that snowy hub city. That was followed by them getting a few of UAL's gates, albeit only for a few years. I'm glad to see that we'll be assisted by another airline that just started service to that hub.

I've lost my pension and I've been away from UAL for almost 4 years, but I'm not mad at current management. Under the current management, UAL has become a viable airline. Make no mistake about it, United Has Survived, United Will Thrive.

 

[Propsync]

I thought it might be the day for 'Double Secret Bankruptcy'. Good news and good luck.

 

[Andy]

Looks like it's a done deal:

http://www.thestreet.com/_yahoo/stocks/tra...=FREE&cm_ite=NA

Court Clears UAL Plan

By TSC Staff
1/20/2006 12:50 PM EST
Click here for more stories by TSC Staff


UAL (UALAQ:OTC BB - commentary - research - Cramer's Take) said the bankruptcy court confirmed its reorganization plan, setting the stage for the carrier to emerge from Chapter 11 protection early next month.

The United Airlines holding company said the U.S. Bankruptcy Court for the Northern District of Illinois determined that the plan "provided fair and equitable treatment of creditors and otherwise satisfied the requirements of the Bankruptcy Code." UAL said its creditors committee withdrew all objections to the plan, helping the company to conclude its restructuring.

 

[WhiteCloud]

All that remains then, Brace said, is to finish United's financing process and get the money from its lenders.

Under that plan, 400 management executives stand to receive 8% of the shares that the company intends to issue upon its emergence from bankruptcy — valued at about $152 million. The stock comes on top of annual salaries that will total $3.5 million for the top eight UAL executives.

Wonder how these "lenders" are reacting to this cash grab. "Sure take a few mil for yourself off the top. No problem".

 

[bizicmo]

Are the people in charge of the airline different then the one's that were in charge when United entered bankrupcy? Or is it the same set of people?

 

[Andy]

Are the people in charge of the airline different then the one's that were in charge when United entered bankrupcy? Or is it the same set of people?

From my previous post on this thread:

As for the rest of UAL's management team, Tilton has quietly done house cleaning. At one point, there were VPs leaving for 'personal reasons/other opportunities' on a regular basis. I for one would like to thank ATA for allowing us to get John Tague. He and Tilton are worth every freaking penny they'll be getting out of this.

 

[FlyUnited]

I'm positive the 'lenders' are completely aware of were their money is going. If they didn't approve of it, they'd pull the switch on it today.

Here is what Tilton had to say today:

Hi, it's Glenn, and it's Friday, January 20, and I am calling from Chicago.

Today is a very important day for United. Judge Wedoff ruled to confirm United's Plan of Reorganization, clearing the way for us to exit Chapter 11 on schedule.

Before today, of the 166 airline bankruptcy filings since 1978, only two passenger carriers have successfully restructured and exited as viable businesses.

That will soon change to three.

The confirmation of our Plan means that it meets all the requirements of the Bankruptcy Code. The judge has determined it provides fair and equitable treatment of our creditors and other stakeholders, and it maximizes the value of United for everyone.

The company's creditors voted overwhelmingly in favor of the plan, and our Creditors' Committee supports it.
We have worked closely together with United's stakeholders to reach resolution of our differences throughout the restructuring, and that ability to work together has been critical to the process.

Our vendors and business partners have worked with us, and we look forward to continuing those relationships to our mutual benefit.

We also appreciate the work of our Creditors' Committee - soon to become our new shareholders.
Earlier this week, we announced the new board of directors named by the company and the Creditors' Committee - five directors from the existing board, five new directors, joined by our two labor representatives on the board. They will begin serving on the board on the effective date of the Plan of Reorganization.

I am pleased that the Association of Flight Attendants reached an agreement in principle with United on a replacement retirement plan. After ratification, this will conclude pension and retirement issues for all employee groups.

We are concluding our restructuring work and look forward to competing in the marketplace and focusing on our customers without distraction.

I know how difficult the last three years have been for all of you personally, and I want to take the opportunity on the call today to thank you for all the work that you've done for our company.

As I said in our press release today, our performance to-date is only an indication of what we are capable of achieving as we go forward.

Our competitors are likely concerned and that should come as no surprise.

The confirmation of our Plan is clear validation of the work we have done to make United a sustainable enterprise with a strong financial and operational foundation.

We will leverage that foundation to take full advantage of the opportunity we have to compete for leadership in the U.S. and worldwide.

Today, we have the momentum to make the most of that opportunity.

But moving ahead with our strategy to differentiate United in the marketplace.

We are determined to further improve everything we do through excellent execution.

And now we can focus all of our energy on our customers.
That's all for now on this call. I will be talking to you again soon. Until then, stay focused on our customers and on one another as one company, and stay united.

 

[BigRed1]

Another point about this "stock grab." The shares are restricted and do not vest 100% immediately as do the employee's shares. While I still think management missed a valid opportunity to gain some badly needed goodwill from the employees, their shares are at risk and will provide management some incentive to make UAL as profitable as possible. 20% of their shares will vest after 6 months. Then another 20% after 1 year, with the remaining 60% of their shares becoming "sellable" in 20% lots over the next 4 years(2010).

And as to "Andy's" point about Tilton's pay. For a multi-billion dollar company of this size producing the kind of sales each year that it does(ie 20 billion dollars) he is paid way below his peers. While I am certainly not defending CEO level pay, as I think it has gotten out of touch with reality, I do think our executives and their pay is in line with their peers and much of their new compensation after BK is "at risk."

Still can't believe this nightmare of BK is coming to a close. Sure will be nice to start putting these hard earned dollars the company makes towards running the business, rather than paying those blood sucking laywers who charge 750 dollars an hour. This BK made a lot of people rich, at the expense of the employees and its creditors.

As a side not...Glad to also see another fair hike stick today, the first of many I hope in 2006 to help offset these pesky stubborn oil prices. This one is only 10 dollars but that ain't bad at all. Hell...Even Northwest actually matched a fair increase. They didn't match 40 of 42 price increase attempts made by UAL from 2002 to 2004, with the sole purpose of helping to put United Airlines in the grave. There were two companies Tilton told us he had a bone to pick with after our exit. Indy Air and Northwest.

 

[Andy]

Indy Air and Northwest.

Someone needs to tell him about F9's tactics after UAL drew down flying in DEN.

 

[Andy]

Wonder how these "lenders" are reacting to this cash grab. "Sure take a few mil for yourself off the top. No problem".

They're more than taken care of. Note that they're getting a very large equity stake in UAL. They ALWAYS get theirs.
The main losers here are the current and retired UAL employees; most everyone else suffered very little.

 

[bizicmo]

Sorry, I was just trying to become better informed of the situation. I can honestly say I don't know that much about it and it sounds like some of the management is still around and some of it isn't. I don't know if Tilton was there prior or not. I know it suck when someone jumps into a long running conversation when they don't know anything at all about the subject. Just curious though.

 

[Andy]

Sorry, I was just trying to become better informed of the situation. I can honestly say I don't know that much about it and it sounds like some of the management is still around and some of it isn't. I don't know if Tilton was there prior or not. I know it suck when someone jumps into a long running conversation when they don't know anything at all about the subject. Just curious though.

No problem.
Goodwin was CEO during and immediately after 9/11. The BoD (board of directors) canned him and put in a temporary guy; can't remember his name anymore. He was there for what seemed like an eternity while many potential CEOs said thanks but no thanks to the BoD.
Tilton has replaced a fair number of VPs; my guesstimate is that half of the ones that got us into chap 11 are no longer there. Of the ones left, I guess that you can't throw out the baby with the bathwater.
There is a lot of shoot-from-the-hip revisionist misinformation out there; I just want to squelch as much of the BS as possible.

 

[bizicmo]

Thank you.

 

[bizicmo]

For starters I think some CEO tend to get paid much more than they are worth. But for someone to come to a company that is failing at the time I don't see any problem with giving them compensation that is base on recovery.

 

[32LT10]

I will be back at UAL before the end of this year. I look forward to helping UAL put the hurt on a few airlines that did us quite a bit of damage post-911. Off the top of my head, there's one that flies around with animals on their tails which did a huge expansion following 911 which coincided with UAL's drawdown in that snowy hub city. That was followed by them getting a few of UAL's gates, albeit only for a few years. I'm glad to see that we'll be assisted by another airline that just started service to that hub.

Andy,

Welcome back. Glad to have you in the battle. Do you have a class date? Best of luck and see you on the line.

 

[81Horse]

-- their shares are at risk and will provide management some incentive to make UAL as profitable as possible.

See, Andy? This is why I'm cynical. Why should executives require incentives (in the form of personal remuneration) to do everything in their power to make their companies profitable? Isn't this their job? No other class of employee is allowed to perform below par in the absence of incentives.

The disgustingly rich compensation, bonus, retention, and retirement packages that have become the norm in big American business are nothing but extortion. IMO, of course.

 

[Andy]

Andy,

Welcome back. Glad to have you in the battle. Do you have a class date? Best of luck and see you on the line.

Based on current recall progression, I expect a call this summer for a fall class date. I can't wait to get back. Um, since I didn't get a chance to vote on those new & improved work rules for the LCC, can I just skip ahead to the 75/767? Seriously though, we need to fix the heinous work rules on the LCC. Besides, I'd miss being able to use the tray table on Fifi.

 

[Andy]

See, Andy? This is why I'm cynical. Why should executives require incentives (in the form of personal remuneration) to do everything in their power to make their companies profitable? Isn't this their job? No other class of employee is allowed to perform below par in the absence of incentives.

The disgustingly rich compensation, bonus, retention, and retirement packages that have become the norm in big American business are nothing but extortion. IMO, of course.

You chose the wrong profession. With the way that you've contorted others' comments on this board, your true calling in life should have been to be an ambulance chaser. Or a writer or news reporter. You excel at mutating others' statements by quoting them out of context and fashioning them in a manner that fits into your murky view of the world and it's inhabitants.

 

[GuppyPuppy]

No problem.
Goodwin was CEO during and immediately after 9/11. The BoD (board of directors) canned him and put in a temporary guy; can't remember his name anymore. He was there for what seemed like an eternity while many potential CEOs said thanks but no thanks to the BoD.

Jack Creighton.

Looks like none of the pilots currently on furlough (who haven't been recalled yet) will get none of the convertible notes. Bummer.

Anyone know what the policy is on bypassing? How long may we bypass?

Cheers!

GP

 

[koko nw]

GuppyPuppy, I Believe you can bypass once.

Once it reaches the bottom of the list, and comes back to you again, you have to make the final "should I stay or should I go decision".

Depending on where you are presently.....Could be a tough call.

As the dealer say's "Good Luck"!!

KokoNW

 

[GuppyPuppy]

GuppyPuppy, I Believe you can bypass once.

Once it reaches the bottom of the list, and comes back to you again, you have to make the final "should I stay or should I go decision".

Depending on where you are presently.....Could be a tough call.

As the dealer say's "Good Luck"!!

KokoNW

I have a good job now and would have to take a paycut to go to the 320 or 737 at UAL. The 767 would be an even swap. In two years I should be making $120-130k at current employer. Can't say that with UAL's current payrates.

Trouble is we have no representation at my current employer. Once UAL starts making money and the contract becomes amendable I expect the pay rates will rise. I'm also attracted to the B and C fund at UAL (just a 401k and profit sharing at current company) and the multitude of west coast domiciles.

Any recallees getting SEA?

Good luck to all.

GP