P.M. BRIEFING : Judge OKs Release of $75 Million Cash to Eastern to Pay Creditors
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ATLANTA — A federal bankruptcy judge today approved the release of $75 million cash from escrow to Eastern Airlines, which the strikebound carrier’s creditors indicated should help meet the company’s financial needs through the end of the quarter.
The Miami-based airline initially had asked U.S. Bankruptcy Judge Burton R. Lifland for the release of $100 million from its creditors, while a committee representing Eastern creditors asked for only $40 million to be released.
However, the parties agreed to the $75-million figure and the judge approved it, with the understanding Eastern could request additional funds in the future.
Eastern was expected to file a plan for reorganizing with the bankruptcy court by the end of the week.
Separately, published reports indicated that Eastern was prepared to sell Latin American routes and most of its terminal space to American Airlines because of continuing difficulties in contract negotiations with its striking pilots’ union.
A memo from Eastern Senior Vice President Tom Matthews to the Air Line Pilots Assn. said the route-sale idea would be scrapped if the company reached a contract agreement with the pilots, according to today’s editions of the Sun-Sentinel in Ft. Lauderdale and the Miami Herald.
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