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"UAL Airport Bonds Trustee Seeks To Use Funds In Trust"
Monday, August 11, 2003
UAL Airport Bonds Trustee Seeks To Use Funds In Trust
By NICHOLAS P. BRAUDE
DOW JONES NEWS
WASHINGTON -- The trustee for $102.6 million of bonds issued for UAL Corp.'s
(UALAQ) facilities at Chicago O'Hare International Airport is asking a
bankruptcy court for the authority to use money in a construction fund to
redeem the bonds.
According to court papers entered on UAL's docket last Tuesday and obtained
by Dow Jones Newswires, trustee SunTrust Bank, the principal subsidiary of
SunTrust Banks Inc. (STI), said that funds related to the bonds are subject
to a trust and aren't the property of UAL's estate.
SunTrust Bank's motion said that in May, UAL's United Airlines sought to
withdraw about $5.8 million from the construction fund, but the trustee
declined the request. The bank said it's authorized to distribute the money
in the construction fund in the ordinary course of business, but is seeking
the court's approval out of "an abundance of caution."
The U.S. Bankruptcy Court in Chicago scheduled a hearing on the matter for
Aug. 29. Interested parties may object through Friday.
The city of Chicago issued the Series 2001A-1 special revenue facility bonds
in February 2001 to pay part of the construction costs for some airport
improvements in areas used by UAL's United Airlines.
When UAL and United Airlines filed for bankruptcy in December 2002, the
balance in the construction fund was about $29.8 million. SunTrust Bank is
seeking to distribute those funds to redeem the bonds.
UAL, Elk Grove Township, Ill., filed for bankruptcy protection in December
2002, listing assets of $84.3 million and debts of $126.6 million as of
Sept. 30, 2002. United Airlines listed assets of $22.73 billion and debts of
$21.48 billion as of the same date in another Chapter 11 filing Dec. 9.
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