Judge Approves American Airlines Reorganization Plan With Caveat

By Paul Riegler on 22 October 2013
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American Airlines' new and old livery

American Airlines’ new and old livery

The judge overseeing American Airlines stay in bankruptcy court formally confirmed the plan of reorganization for the airline and its parent, AMR Corp. on Monday.

The move was not unexpected since U.S. Bankruptcy Judge Sean Lane had stated his intention to do so on September 12.

In approving the plan, the judge issued one caveat: “Nothing in this Confirmation Order shall be construed as an adjudication of any causes of action asserted in the DOJ Action or as otherwise expressing the Court’s position with respect to the DOJ Action.”

The Department of Justice’s suit to block the planned merger of American with US Airways was filed in August.  The merger is a key element of the airline’s plan of reorganization.

Lane said that if the airlines “reach a settlement of the DOJ Action, the Debtors shall file a motion with the Court seeking approval of the Debtors’ execution of and entry into such settlement.”

At that time, the judge “shall determine whether the settlement would materially and adversely affect the treatment of holders of Claims and AMR Equity Interests under the Plan” and also whether it would require a new vote on the plan by those stakeholders.

(Photo: Accura Media Group)

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