P.M. BRIEFING : Eastern Seeks Court Extension
NEW YORK — Eastern Airlines, which is struggling to emerge from bankruptcy, has asked for an extra 60 days to redraft its reorganization plan because of an expected $200-million cash shortage, a person familiar with the Chapter 11 proceedings said today.
The cash shortfall may keep Eastern’s case in federal Bankruptcy Court until spring, instead of allowing it to emerge by the end of December, as the Texas Air Corp. unit had hoped.
The shortage in cash was mainly caused by Eastern’s failure to sell a planned $100 million in secured debt. The source said the carrier also could not find buyers for about $40 million in Continental Airlines bonds that Eastern holds.
Adding to the shortage was a judgment against Eastern last week that awarded pilots $60 million in a pay dispute.
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