United Airlines Wants Ethics Professor Out of Bankruptcy Court

Jan. 20, 2006 (The Denver Post) — Could poor employee morale hurt United Airlines' bottom line as it tries to exit bankruptcy?

Maybe. Maybe not. But if United has its way, the issue won't come up in bankruptcy court this week as the company seeks confirmation of its reorganization plan.

United parent UAL Corp. has asked the court to exclude testimony from a business ethics professor who plans to testify that giving United executives millions of shares of new United stock could hurt morale.

University of Washington Business School professor Thomas M. Jones was retained as an expert witness by the Association of Flight Attendants at United. In a report to the court, he wrote, "Poor relations with employees will surely make the firm's economic recovery much more difficult than it would otherwise be." In another court filing, United counters, "Jones' views on business ethics and morality, as intellectually stimulating as they may be, have absolutely no bearing on whether United's plan of reorganization should be confirmed." But the motion was denied and Jones' testimony will be permitted, according to the flight attendants union.

United is the largest carrier at Denver International Airport and has more than 5,000 employees in Denver. It is targeting Feb. 1 as the date it will exit its three-year Chapter 11 bankruptcy.

United last week reached a critical agreement with the creditors committee on its reorganization plan. Remaining objections will be heard in bankruptcy court in Chicago starting today.

The company's latest incentive plan calls for 8 percent of new United stock, or 10 million shares, to be reserved for management equity incentives.

U.S. Bank National Association, Bank of New York and Wells Fargo Bank Northwest NA have asked the court to let them change their votes on the plan in light of the "last-minute agreement" between United and the creditors.
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