American Airlines Bankruptcy Plan Approved

By Paul Riegler on 12 September 2013
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A federal judge in New York approved American Airlines’ reorganization plan.  The plan includes emerging from bankruptcy protection and merging with US Airways, although the two airlines still face a federal antitrust lawsuit seeking to block the merger.

Federal bankruptcy court Judge Sean Lane approved the plan on Thursday.  Last month, the judge indicated that he was uncertain whether or not he could approve the plan prior to regulatory approval by the Department of Justice.  In giving the green light, Lane said “there can be no dispute that the plan is feasible if the merger is allowed to proceed [based on the outcome of the antitrust suit].”  The fact that AMR’s unsecured creditors, shareholders, and bondholders all support the merger was proof of this, he said.

The antitrust trial, in the courtroom of U.S. District Judge Colleen Kollar-Kotelly, will start in late November.

If the airlines do not prevail in the court case, American Airlines parent AMR will have to file a new restructuring plan that does not include the merger, Lane said.  If the court case results in a settlement such as giving up takeoff and landing slots at Reagan National Airport, Lane would have to review the terms of the settlement because it would modify the reorganization plan.

(Photo: Accura Media Group)

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