US Airways trustee opposes plan on eve of hearing NEW YORK (Reuters) =97 A U.S. bankruptcy trustee objected Monday to U.S.=20 Airways' plan to emerge from Chapter 11, one day before a hearing on the=20 No. 7 U.S. airline's reorganization plan is slated to begin. The trustee=20 said in a court filing that U.S. Airways' plan to release current and=20 former executives, board members and lawyers from potential liability=20 arising from the bankruptcy would violate federal and state law. "Such=20 releases are not part of any global settlement or deal that benefits this=20 bankruptcy estate," trustee W. Clarkson McDow Jr. said in the filing with=20 the U.S. Bankruptcy Court in Alexandria, Va. "The releases stand starkly=20 alone in the Plan unsupported by any legal justification and there is no=20 indication that the releases are necessary to the Plan or fair," he said.=20 The bankruptcy court appoints the the trustee to represent the interests of= =20 the bankruptcy estate and creditors. Other parties have also objected to=20 parts of US Airways' plan. A spokesman for the Arlington, Va-based airline,= =20 David Castelveter, said: "We are working to resolve as many of these=20 objections as possible prior to Tuesday's hearing, but if not, we believe=20 we will prevail before the court." Anthony Sabino, an associate professor=20 of business at St. John's University in New York, said the objection might= =20 complicate US Airways' plan to exit Chapter 11 this month. "Given the=20 circumstances in the world right now, that does not bode well for US=20 Airways' reorganization efforts," he said. "Any delay at this critical=20 point could prove very damaging." U.S. Airways, which sought bankruptcy=20 protection in August, wants to emerge by March 31, enabling it to obtain a= =20 $900 million federal loan guarantee. HEARING TO START TUESDAY It is seeking approval from the federal Pension Benefit Guarantee Corp. to= =20 replace its pilots' pension plan with a less costly one. It also wants a=20 new credit card processor. The airline industry's gloomy outlook is being=20 further clouded by a looming war with Iraq, which is depressing travel and= =20 has helped send fuel prices soaring. Bill Rochelle, a partner at Fulbright= =20 & Jaworski LLP, a law firm in New York, said the liability issue is the=20 kind a U.S. trustee might raise, but that the trustee's objection should=20 not derail U.S. Airways' exit from bankruptcy. "The trustee's job is to=20 protect the public, to see the law enforced," said Rochelle. "It should not= =20 be a stumbling block. Bankruptcy judges will generally assist large=20 companies in emerging from Chapter 11 if they have complied with the law."= =20 Among other parts of U.S. Airways' Chapter 11 plan that have drawn=20 opposition include whether former chief executives Rakesh Gangwal and=20 Stephen Wolf should receive payments of about $15 million each. A hearing=20 on the airline's reorganization is due to begin Tuesday morning before=20 Judge Stephen Mitchell in Alexandria. U.S. Airways shares closed Monday in= =20 over-the-counter trading at 10.9 cents, down 1 cent. *************************************************** The owner of Roger's Trinbago Site/TnTisland.com Roj (Roger James) escape email mailto:ejames@xxxxxxxxx Trinbago site: www.tntisland.com Carib Brass Ctn site www.tntisland.com/caribbeanbrassconnection/ Steel Expressions www.mts.net/~ejames/se/ Site of the Week: http://www.thehummingbirdonline.com TnT Webdirectory: http://search.co.tt *********************************************************