UAL Gets Another Crack At Loan Guarantees

United Airlines has until the end of next month to come up with a Chapter 11 reorganization plan, which might include yet another application to the Air Transport Stabilization Board for $1.6 billion in loan guarantees. Should it lose this time, United could well lose out on $2 billion in bank loans from JP Morgan, Chase and Citigroup.

If no new guarantees are forthcoming, then United could very well look like a bride in search of a groom -- someone in a hurry, but someone she can tolerate.

In fact, the Denver Post reports that's just what the ATSB wants United to do -- find an equity partner.

"There are - and remain - major investors who believe the United franchise is worth saving," William Brandt told the Post. Brandt is a bankruptcy consultant and chief executive of Development Specialists Inc. in Chicago.

Who might that be? The Denver paper suggests Texas Pacific Group. Sure, you've heard that name before. The same group stepped in to bail out both Continental and America West during their bankruptcies.

But Brandt warned, what's good for the airline may not be good for airline executives.

"The catch for management is that a significant portion of those (investors) would part company with current management and many members of the board," he said.

FMI: www.ual.com