American Airlines Judge to Rule on Merger Prior to Thanksgiving

An American Airlines 757 landing at LAX on Sunday

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American Airlines and US Airways should get a ruling on American’s request to exit bankruptcy and merge with US Airways from U.S. Bankruptcy Judge Sean Lane before the Thanksgiving holiday.

The judge, noting that he was conscious of the holiday, said he was going to “issue a decision very quickly,” and at the very latest, “by Wednesday.”  “I don’t plan on thinking about this over Thanksgiving,” he said

Judge Lane indicated the decision could take several forms, including a bench decision, which is typically read aloud by the judge to the parties and their lawyers.  Lane, noting the difficulty of traveling during the Thanksgiving holiday, said he would not require the participants to return to his courtroom.

Lane heard statements from attorneys for the two airlines as well as American’s unsecured creditors committee, in favor of the merger.

The main issue before the court is to determine whether a settlement by American and US Airways in the Department of Justice’s antitrust suit that sought to block the merger requires American to ask its creditors and shareholders to ratify the now-modified plan.

The other issue before the court is a private antitrust suit filed earlier this year by a group of airline passengers and travel agents seeking to block the merger.  The suit, which was put on hold until the Department of Justice action had been settled, argued along similar lines as the DOJ case, namely that the merger would reduce capacity and competition.

American’s attorneys countered that the suit lacks sufficient evidence of irreparable harm done to the plaintiffs and cites the potential harm that a delay in the merger would cause the two airlines as well as to its creditors and shareholders.

(Photo: Accura Media Group)