Judge OKs Financing Plan for US Airways

A federal judge approved a $740-million deal between US Airways Group Inc. and an Alabama pension fund for emergency financing and a stake in the airline once it emerges from bankruptcy proceedings.

Judge Stephen Mitchell of the U.S. Bankruptcy Court for the Eastern District of Virginia approved the arrangement with Retirement Systems of Alabama for an eventual 37.5% equity investment in the carrier worth $240 million.

Mitchell also approved an agreement for $500 million in debtor-in-possession financing underwritten by the Alabama group.

The judge released $300 million from the deal to the airline immediately and plans to rule on the balance next month.