Judge Permits Eastern to Tap Its Escrow Fund
NEW YORK — A federal bankruptcy judge on Thursday approved the release of $75 million from an escrow fund to help strikebound Eastern Airlines with its financial needs in coming months.
Eastern initially had asked U.S. Bankruptcy Judge Burton R. Lifland for the release of $100 million from creditors, while a committee representing Eastern’s major 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 money from the escrow fund, which contains money from asset sales.
Miami-based Eastern said it expected to file its reorganization plan today, centering on emerging from Chapter 11 bankruptcy protection and rebuilding as a smaller carrier.
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