=20 ---------------------------------------------------------------------- This article was sent to you by someone who found it on SF Gate. The original article can be found on SFGate.com here: http://www.sfgate.com/cgi-bin/article.cgi?file=3D/news/archive/2003/03/17/f= inancial1853EST0287.DTL ---------------------------------------------------------------------- Monday, March 17, 2003 (AP) Creditors approve US Airways reorganization plan MATTHEW BARAKAT, AP Business Writer (03-17) 15:53 PST ALEXANDRIA, Va. (AP) -- US Airways' creditors voted overwhelmingly on Monday to approve the airline's reorganization plan, which undergoes a final review by a bankruptcy judge on Tuesday. Also on Monday, the federal government objected to the reorganization pl= an proposed by the bankrupt airline, saying it unfairly limits the legal liability of the airline's legal and financial advisers. Bankruptcy experts said the dispute is a common one that should not present a significant hurdle to the airline's overall plans. The airline said Monday that all the creditor classes approved the plan with a minimum support of 81 percent. Unsecured creditors will receive only 1 to 2 cents on the dollar against their claims. Shareholders will get nothing; they did not vote on the plan. The objection from the U.S. Trustee's office came one day before the confirmation hearing, in which US Airways hopes Bankruptcy Judge Stephen Mitchell will give his blessing to the airline's plan and allow it to emerge from bankruptcy at the end of the month. The trustee's objection is one among more than a dozen filed by various parties, including the airline's pilots' union, which has objected to efforts to terminate its pension plan. Dennis Early, a lawyer with the trustee's office, declined to comment on the filing. In the 12-page motion, the trustees say the airline improperly seeks to limit the liability of its lawyers, financial advisers, creditors' committee and other groups to instances of willful misconduct. "Standards of professionalism dictate that attorneys not shield themselv= es from liability potentially resulting from carrying out fiduciary duties on behalf of clients," Early wrote in the brief. US Airways spokesman David Castelveter said the airline is working to resolve objections filed by the trustee's office and other groups. "But if not, we believe we will prevail in court," Castelveter said. Evelyn Biery, who heads the bankruptcy practice for the Houston-based law firm Fulbright and Jaworsky, said it is common for the trustee and a bankrupt company to differ on the issue of legal liability because bankruptcy law does not spell out a specific legal standard. "The bankruptcy professionals of all kinds will all try to get as much immunity from their own negligence as they can," she said. "The U.S. Trustee always takes a firm position against that." Perhaps the most serious objection to the airline's reorganization plan comes from the Air Line Pilots Association. The airline wants to terminate the existing plan and hand it over the federal Pension Benefits Guaranty Corporation. They would replace the old plan with a new, smaller plan that would save the company about $800 million over the next seven years. The pilots, many of whom could see their benefits cut in half, are fighting the airline. But over the weekend the union's actuaries concluded that US Airways' financial projections about the need to terminate the plan are accurate. The union and airline still differ, though, on specific issues related to the pension. Negotiations are ongoing. =20 ---------------------------------------------------------------------- Copyright 2003 AP