UAL Rebounds After Bankruptcy Rumor

Updated from 11:46 a.m. EDT

Shares in UAL (UAUA), the parent of United Airlines, plunged Monday morning after a six-year old story proclaiming that the carrier had filed for bankruptcy protection mistakenly made the rounds.

UAL shares opened the session at $12.16 and plummeted as low as $3 before trading was halted. By the afternoon, the shares had mostly recovered, but they were still trading down 12% at $10.79.

The confusion began after a 2002 Chicago Tribune story headlined "United Files For Bankruptcy" appeared on some Web sites with a date of Sept. 6, 2008. United filed for Chapter 11 in December 2002 and left bankruptcy in early 2006.

The article was then found by a firm called Income Securities Advisors, which posted it to Bloomberg terminals. The firm later retracted the posting.

The story had originally appeared in the South Florida Sun-Sentinel right after United's bankruptcy. The Sun-Sentinel and the Chicago Tribune are owned by Tribune.

"We have been informed that a 2002 Chicago Tribune news report about United Airlines' financial condition was picked up and circulated on the Internet Monday morning. The story is not current. We are looking into the situation," Tribune said in a statement.

United said it "has demanded a retraction from the Sun-Sentinel and is launching an investigation." The airline also said it "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."

In a research report, Standard & Poor's airline analyst Jim Corridore reiterated a hold rating on the airline.

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