AMR BANKRUPTCY PLAN APPROVED; UNIONS PUSH FOR END TO LAWSUIT

By Gilman & Edwards
22.09.13
12:14 AM
<< Blog

AMR Inc. won a major victory in U.S. Bankruptcy Court recently. The court approved the company’s bankruptcy exit plan, in spite of a challenge from the Department of Justice to the plan’s most important component, the merger of AMR’s American Airlines with US Airways.

The approval was hard won by AMR. The court had expressed its reluctance to approve a plan that could change so drastically. The judge in the case finally determined that the lawsuit was a separate matter, that his role was to determine if the Chapter 11 exit plan meets with standards set in the bankruptcy code.

In his statement, the judge said, “The question is whether it will succeed once consummated, not whether it will be consummated.” The plan to merge AMR’s and US Airways Group Inc.’s operations is feasible, he said.

AMR’s attention will now shift to defeating the DOJ’s antitrust lawsuit. As the corporations work on their legal strategies, others are rallying support on Capitol Hill.

Representatives of the Association of Professional Flight Attendants at American Airlines met with DOJ officials recently in support of the merger. The merger is necessary to secure its members’ jobs now and in the future, the union argued. Workers have “been in limbo too long,” the representatives said.

While union representatives met with the DOJ, airline employees met with members of Congress. The hope is to build enough support for the merger among lawmakers that the DOJ will either back down or settle quickly.

The Bankruptcy Court may not have seen the last of AMR, of course. If the lawsuit results in any changes to the merger and the corporation’s plans to pay off its creditors, the new plan would need the court’s blessing.

Speak with a qualified Bethesda Maryland Bankruptcy Court Attorney today if you think bankruptcy may be the right move for your Maryland-based business.

Source: Reuters, “UPDATE 2-AMR bankruptcy plan wins court approval,” Nick Brown, Sep. 12, 2013 Bloomberg, “AMR-US Airways Unions Meet U.S. Official on Merger Suit,” Mary Schlangenstein and David McLaughlin, Sep. 18, 2013

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