Eastern Can Use $75 Million From Escrow
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NEW YORK — A federal bankruptcy judge on Tuesday released $75 million from escrow to Eastern Airlines and gave the troubled carrier permission to sell a $30-million note that it owns.
In a hearing, U.S. Bankruptcy Judge Burton R. Lifland granted Eastern’s request to use $75 million in proceeds from asset sales to help run its operations through the end of the year.
Miami-based Eastern, which was struck by its unions and filed for Chapter 11 bankruptcy protection in early March, is selling about $1.8 billion in assets and attempting to rebuild as a smaller carrier.
In a separate action, the Senate voted to cut off debate on long-stalled legislation that would require the creation of a commission to investigate and recommend solutions to the Eastern strike, which has entered its eighth month.
David I. Shapiro, the court-appointed bankruptcy examiner for Eastern, told Lifland that he supported Eastern’s request for the funds on the grounds that it needed the cash to keep operating.
After the $75 million is withdrawn, Eastern will have about $300 million left in escrow from which to repay its creditors or cover operating expenses.
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