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 United States Bankruptcy Judge Burton Lifland ruled Wednesday night that a total of $30 million could be withdrawn from the account in two increments of $15 million.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.