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Administration December 12, 2002
UAL Gets Court Order Halting Stock Sales
December 12, 2002 (PLANSPONSOR.com) - United
Airlines parent UAL Corp. says it has received the backing of
a bankruptcy court order to prevent large stock holders of
the airline from selling or transferring their holdings -
notably State Street Bank and Trust, its employee stock
ownership plan (ESOP) adviser, according to a Reuters
report.
Reported by Eric Hazard
UAL says the court order, in effect until a December 30 hearing determines its suitability, only applies to business units holding $65 million, approximately 2.5 million shares, or more in company stock. The company said the move is necessary to help preserve current operating losses, which it can use to avoid current and future tax liabilities.
In an October regulatory filing, State Street said it might sell up to a fifth of its UAL shares on concerns from United employees, who hold 55% of the company’s stock.
State Street might have made other moves as well, including selling its United ESOP business to a third party, effectively giving control of UAL to a new owner. Although such as move was unlikely, the injunction will not prevent such action.