United Airlines' independent trustee of employee stock ownership prohibited from selling shares

Airline Industry Information, Feb 24, 2003

AIRLINE INDUSTRY INFORMATION-(C)1997-2003 M2 COMMUNICATIONS LTD

A bankruptcy judge has ruled that the independent trustee for United Airlines' employee stock ownership cannot sell any further shares.

Since December 2002, the trustee - State Street Bank and Trust - has been seeking court approval to sell the shares to protect shareholder value since common and preferred shares of stock are typically rendered worthless by bankruptcy. However, United Airlines is against the additional share sales as they could jeopardise special tax benefits which the carrier is seeking to preserve.

The US judge ruled in favour of the airline on Friday (21 February), according to Reuters.

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