The Internal Revenue Service ruled yesterday that United Airlines will not lose a $1.4 billion annual tax benefit for employee ownership even if the amount of company stock held in the employee stock ownership plan (ESOP) drops below twenty percent. The ruling will likely eliminate the bankrupt airline's attempts to prevent the sale by the ESOP trustee of a significant amount of the greatly devalued United stock still held in the plan (see WIT for Jan. 14, 2003). Whether or not the sale will occur remains to be seen, as it is opposed by the union representing United's pilots---whose member on the company's board of directors will lose special voting privileges including control over CEO appointments if the sale goes through.
See "Ruling May End Employee Control of United Airlines", KEITH L. ALEXANDER, The Washington Post, March 4, 2003