A U.S. bankruptcy court judge on Friday approved a 30-day exclusivity extension for United Airlines, giving the carrier another month to file its own reorganization plan without competing plans from creditors.
Judge Eugene Wedoff also approved changes to the carrier's debtor-in-possession financing, which will provide the airline with an additional $500 million to continue operating while it reorganizes, informs Reuters.
Such a default by the nation's second-largest airline would affect about 119,000 employees and retirees and be the largest ever by a U.S. company.
The International Association of Machinists and Aerospace Workers, representing more than 20,000 ramp workers and customer-service agents at United, and the Association of Flight Attendants had already filed court objections to the company's interim financing plan and its decision to stop payments to the pension funds.
In July, United deferred a required quarterly pension fund payment of $72 million, characterizing it as a "huge financial burden" and saying it planned no further payments while in bankruptcy.
United Airlines attorney James Sprayregen told the court Friday that federal bankruptcy laws trump employee-benefit rules that require companies to make regular contributions to their pension plans, reports ABC News.
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