Says Erroneous Online Report To Blame

ANN REALTIME REPORTING 09.08.08 1530 EDT: The reposting of a six-year-old news report was to blame Monday for panic among investors in UAL Corp., parent company of United Airlines... who dumped their shares in the troubled carrier, believing UAL had filed for Chapter 11 bankruptcy for the second time in six years.

The run on United shares began Monday morning, when the South Florida Sun-Sentinel posted a 2002 Chicago Tribune story about United's original Chapter 11 filing on its Web site. That story was, in turn, picked up by Income Securities Advisors Inc... which then redistributed it on the Bloomberg wire network.

Bloomberg picked up the story, but quickly pulled the article when United vehemently asserted it had not, in fact, filed for bankruptcy again.

"United has demanded a retraction from the Sun-Sentinel and is launching an investigation," the airline said in a terse release. "United continues to execute its previously announced business plan to successfully navigate through an environment marked by volatile fuel prices and continues to have strong liquidity."

United spokeswoman Jean Medina had no further comment.

The Tribune Co, which owns both the Chicago Tribune and the Sun-Sentinel, also took pains to clarify the situation.

"We have been informed that a 2002 Chicago Tribune news report about United Airlines' financial condition was picked up and circulated on the Internet Monday morning," Chicago-based Tribune said in a statement. "The story is not current. We are looking into the situation."

Income Securities president Richard Lehmann said his company ran the story after doing a routine search for news items related to bankruptcy filings. "The story was dated Sept. 8, 2008," Lehmann said Monday. "There was nothing in the story to indicate it was really a 6-year-old story."

Shares in United mostly rebounded following a 90-minute halt in trading, after falling some 76 percent to a low of almost $3. By midday, stock was down $1.12, or 9.2 percent, to $11.18.

FMI: www.united.com