graphic
graphic  
graphic
News > Companies
graphic
UAL flirting with Chapter 11?
Struggling carrier admits hiring bankruptcy lawyers but won't say if filing is imminent.
August 2, 2002: 1:16 PM EDT

NEW YORK (CNN/Money) - UAL, the financially struggling parent of United Airlines, hired bankruptcy lawyers late last year as its cash crunch grew following the Sept. 11 terrorist attacks, a spokesman confirmed to CNN/Money Friday.

But working with bankruptcy lawyers doesn't mean filing is imminent, UAL spokesman Joe Hopkins said.

"We're pursuing getting our costs down and getting the loan guarantee from the Federal government," Hopkins said. "We have a financial recovery plan that considers several elements."

But when pressed on whether the company would file Chapter 11, he refused to comment.

Hopkins' remarks came in response to an article in BusinessWeek magazine speculating that the carrier might file for Chapter 11 bankruptcy protection by year-end. Hopkins also said the BusinessWeek article erroneously reported that the bankruptcy lawyers were hired earlier this year.

UAL and the airline industry in general have faced difficult challenges in meeting financial goals and keeping customers flying in the past year, as travel declined sharply amid post-Sept. 11 fears and a lagging economy.

The company has applied for $1.8 billion in new loans backed by the federal government and also just launched a marketing alliance with US Airways to boost its revenue.

UAL (UAL: down $1.06 to $4.16, Research, Estimates) shares, which traded at $34 a year ago, have seen a precipitous plunge since then, falling over 80 percent -- farther than shares of any major carrier except US Airways Group (U: down $0.12 to $2.40, Research, Estimates), the report said.

In July alone, UAL shares dropped 48 percent to $5.95 following a weak earnings report and a deteriorating outlook. UAL's market capitalization totals just $332 million versus $1.74 billion for arch rival AMR Corp, according to the BusinessWeek report.

Adding to its woes, credit rating agency Standard & Poor's downgraded the company's debt in June.  Top of page




  More on NEWS
McDonald's violated worker rights: NLRB
Sony exec fires back at President Obama
U.S. ends TARP with $15.3 billion profit
  TODAY'S TOP STORIES
Sony exec fires back at President Obama
Obama: Sony made a 'mistake' in pulling film
Obama calls James Franco 'James Flacco'




graphic graphic

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.