=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/2003/04/21/f= inancial1522EDT0159.DTL ---------------------------------------------------------------------- Monday, April 21, 2003 (AP) Air Canada facing crucial bankruptcy hearing Tuesday MONICA GUTSCHI, Dow Jones Newswires (04-21) 12:22 PDT (AP) -- TORONTO (Dow Jones/AP) -- Air Canada's bankruptcy hearing Tuesday will give creditors, investors and others a chance to air grievances and could provide a clue to the airline's future strategy. Since April 1, when Air Canada filed for bankruptcy protection, all existing contracts have been suspended and payments by the company have been restricted to certain obligations necessary to continue operations. According to court documents, the airline's lawyers will ask bankruptcy judge Justice James Farley of the Ontario Supreme Court to extend that protection to the end of June and to allow it to postpone its annual general meeting of shareholders. In its motion, Air Canada said it needed the extra time to come up with a plan of arrangement that will allow it to exit bankruptcy protection. The original application gave it only until May 1. But many of the groups affected by the bankruptcy filing will be asking the judge to force Air Canada to respect contracts that existed before the filing, make payments that have been postponed, or to accept specific financial claims. Air Canada will have to prove it needs the extra time. According to Justice Farley's April 1 statement, "the onus rests with the applicants in any such case to show that the relief sought and obtained continues to be warranted." Creditors aren't likely to agree to make concessions unless labor does too, while the airline will probably push to keep all its options open. According to court-appointed monitors Ernst & Young, Air Canada will need "at least" until mid-May "before they are in a position to share their revised business plan with the stakeholders." As well, the monitor's report filed with Air Canada's lawyers Stikeman & Elliott says the company will begin meeting with unions around April 30 with a plan expected to form "the foundation of negotiations of new arrangements to permit a successful restructuring." But union leaders have already filed a motion with the court to prevent the airline from overriding existing labor agreements and say they would prefer to remain outside the restructuring process. =20 ---------------------------------------------------------------------- Copyright 2003 AP