UAL shares plummet on old story about bankruptcy

The Nasdaq stock market will not cancel any trades of UAL Corp. stock made yesterday. (Uli Seit/The New York Times)

DALLAS - United Airlines parent UAL Corp. said it didn't file for bankruptcy, after a financial-research firm mistakenly presented a six-year-old Chicago Tribune article on the carrier's 2002 Chapter 11 filing as new information.

The shares fell as much as 76 percent before trading was halted for about 90 minutes, then recovered most of the decline. Trades of UAL between 10:55 a.m. and 11:08 a.m. won't be canceled, the Nasdaq Stock Market said on its website.

The December 2002 news report was posted online by the South Florida Sun-Sentinel and was picked up by Income Securities Advisors Inc., said Richard Lehmann, president of the Miami Lakes, Fla.-based research firm. Income Securities distributed the report on the Bloomberg terminal before retracting it and issuing a correction.

Bloomberg News also ran a headline citing the Tribune story after the article appeared on the Sun-Sentinel website.

"United has demanded a retraction from the Sun-Sentinel and is launching an investigation," the Chicago-based carrier said. UAL filed for bankruptcy on Dec. 9, 2002, and left court supervision on Feb. 1, 2006. United is the world's second-biggest airline by passenger traffic.

Sun-Sentinel editor Earl Maucker didn't return calls seeking comment. Maucker was quoted by journalism website PoynterOnline as saying the paper didn't republish the 2002 article.

Tribune Co., which owns the Chicago Tribune and the Fort Lauderdale, Fla.-based Sun-Sentinel, said the story was in the "archive section" of the Sun-Sentinel's website.

"The story contains information that would clearly lead a reader to the conclusion that it was related to events in 2002," Chicago-based Tribune said. "In addition, the comments posted along with the story are dated 2002."

UAL closed down $1.38, or 11.2 percent, to $10.92 in Nasdaq Stock Market composite trading.

"We expect regulatory review of today's events, as well as shareholder litigation," Jim Corridore, a Standard & Poor's equity analyst, said in a note to investors. "We do not believe UAL will have major legal issues resulting from today's strange events."

Income Securities published a summary of the 2002 story after finding it during a routine online search for news stories about bankruptcy filings, Lehmann said. The summary appeared on the Bloomberg terminal and was reported by other news outlets.

"The story was dated Sept. 8, 2008," Lehmann said. "There was nothing in the story to indicate it was really a six-year-old story."

UAL has had net losses totaling $3.32 billion during the past three quarters as it pared the value of assets to blunt record high fuel prices.

"United continues to execute its previously announced business plan to successfully navigate through an environment marked by volatile fuel prices and continues to have strong liquidity," the airline said in a statement.

A United spokeswoman declined to comment beyond the statement.