Eastern Can Keep Flying, US Bankruptcy Judge Rules

EASTERN Airlines won a reprieve from liquidation when a federal bankruptcy court allowed the beleaguered carrier to take more money from an escrow fund to meet its operating expenses. United States Bankruptcy Judge Burton Lifland ruled Wednesday night that a total of $30 million could be withdrawn from the account in two increments of $15 million. Some $257 million for unsecured creditors remains in the escrow fund.

The first $15 million will be available immediately.

Judge Lifland, who is overseeing the bankruptcy proceedings, heard arguments from unsecured creditors that Eastern should be liquidated immediately. But the company's court-appointed trustee said the carrier could be self-sufficient by early next year.

``It is clear that there is a reasonable basis to come to the business judgment with respect to not liquidating the airline,'' Lifland said in his ruling.

He said there was a major public interest at stake when considering liquidation. He cited Eastern's 18,000 jobs, the communities it serves, and the ``danger of concentration'' that could occur if competition was lessened in the airline industry.

You've read  of  free articles. Subscribe to continue.
QR Code to Eastern Can Keep Flying, US Bankruptcy Judge Rules
Read this article in
QR Code to Subscription page
Start your subscription today