Contemporary Business Law 8th Edition by Henry Cheeseman

تمرين 7

Ethics Case UAL Corporation is the parent company of United Airlines, which was the largest scheduled passen­ger commercial airline in the world. On a daily basis, the airline offered more than 1,500 flights to 26 countries. The airline also offered regional service to domestic hubs through United Express carriers. Eventually, low-cost airlines such as Southwest Airlines began taking business from United. In response, United lowered fares to compete with the aow-cost airlines. However, United's cost structure could not support its new strategy, and the company began losing sub­stantial money on its operations.
UAL filed for Chapter 11 reorganization bankruptcy. At the time of filing the petition, UAL owned or leased air­planes, equipment, trucks and other vehicles, docking space at airports, warehouses, office space, and other assets. In many cases, UAL had borrowed the money to purchase or lease these assets. Most of the lenders took back mortgages or secu­rity interests in the assets for which they had loaned money to UAL to purchase or lease. In addition, UAL owed unsecured creditors money that it could not repay, and it had execu­tory contracts and unexpired leases that it also could not pay. What should UAL propose to do in its plan of reorganization that it files with the bankruptcy court? In re UAL Corporation