United Airlines 2007 Annual Report Download - page 26

ITEM 3. LEGAL PROCEEDINGS.
In re: UAL Corporation, et. al.
As discussed above, on the Petition Date the Debtors filed voluntary petitions to reorganize their businesses under Chapter 11 of the Bankruptcy Code. On
October 20, 2005, the Debtors filed the Debtor's First Amended Joint Plan of Reorganization Pursuant to Chapter 11 of the United States Bankruptcy Code and
the Disclosure Statement.
Commencing on October 27, 2005, all eligible classes of creditors had the opportunity to vote to accept or reject the Debtors proposed Plan of
Reorganization. After a hearing on confirmation, on January 20, 2006, the Bankruptcy Court confirmed the Plan of Reorganization. The Plan of Reorganization
became effective and the Debtors emerged from bankruptcy protection on the Effective Date.
Numerous pre-petition claims still await resolution in the Bankruptcy Court due to the Company's objections to either the existence of liability or the
amount of the claim. The process of determining whether liability exists and liquidating the amounts is likely to continue through 2008. Additionally, certain
significant matters remain to be resolved in the Bankruptcy Court. For details see Note 1, "Voluntary Reorganization Under Chapter 11," in the Combined Notes
to Consolidated Financial Statements.
Air Cargo/Passenger Surcharge Investigations
In February 2006, the European Commission (the "Commission") and the DOJ commenced an international investigation into what government officials
describe as a possible price fixing conspiracy relating to certain surcharges included in tariffs for carrying air cargo. In June 2006, United received a subpoena
from the DOJ requesting information related to certain passenger pricing practices and surcharges applicable to international passenger routes. We are
cooperating fully. United is considered a source of information for the DOJ investigation, not a target.
Separately, United received information requests regarding cargo pricing matters from the competition authorities in Brazil, the European Union and
Australia. On December 18, 2007, the Commission issued a Statement of Objections to 26 air carriers setting out evidence related to the utilization of fuel and
security surcharges and exchange of pricing information that the Commission views as supporting the conclusion that an illegal price-fixing cartel had been in
operation in the air cargo transportation industry. United is cooperating with the Commission's investigation. United intends to defend itself vigorously against
these charges in its formal response to the Commission and in the European Court of Justice if necessary.
In addition to the government investigations, United and other air cargo carriers were named as defendants in over ninety class action lawsuits alleging civil
damages as a result of the purported air cargo pricing conspiracy. Those lawsuits were consolidated for pretrial activities in the United States Federal Court for
the Eastern District of New York. United entered into an agreement with the majority of the private plaintiffs to dismiss United from the class action lawsuits in
return for an agreement to cooperate with the plaintiffs' factual investigation and United is no longer named as a defendant in the consolidated civil lawsuit. The
Company is reviewing whether its receipt of a Statement of Objections from the EU Commission will impact the civil litigation.
Multiple putative class actions have also been filed alleging violations of the antitrust laws with respect to passenger pricing practices. Those lawsuits have
been consolidated or are pending consolidation for pretrial activities in the United States Federal Court for the Northern District of California ("Federal Court").
United has entered into a settlement agreement with a number of the plaintiffs in the passenger pricing cases to dismiss United from the class action lawsuits in
return for an
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Source: UNITED AIR LINES INC, 10-K, February 29, 2008