The PBGC is asking the court overseeing United Airlines' Chapter 11 bankruptcy reorganization to postpone a potential trial on the carrier's motion for the authority to terminate its pension plans, according to court documents. The carrier's parent, UAL Corp., Chicago, is asking the U.S. Bankruptcy Court in Chicago to approve a voluntary distress termination of the plans. A trial is slated to begin May 11 if United cannot reach agreements with its labor groups. The agency is asking the court to consider its motion at a hearing April 22; the filing did not propose a set timetable for postponing the airline's motion.
Attorneys for the PBGC argued in the motion, filed Thursday, that UAL's termination motion "is premature" and that the court must determine that terminating the plan would be integral to the company's paying all its debts and continuing business outside of bankruptcy. The agency's filing said the court "cannot make that determination until United is much closer to emerging from bankruptcy." Officials at the airline asked the court earlier this month to extend the company's exclusive right to file a reorganization plan to July 1, from April 30. The court will consider that request April 22.
The PBGC believes United "can afford to maintain at least one or more of its pension plans" based on the airline's last business plan, the agency's filing said.
