Bloomberg News

American Airlines Asks Court to Approve US Airways Merger

February 22, 2013

American Airlines parent AMR Corp. (AAMRQ:US) asked the judge overseeing its bankruptcy case to approve its $11 billion merger with US Airways Group Inc. (LCC:US) to create the world’s largest carrier.

U.S. Bankruptcy Judge Sean Lane in Manhattan is scheduled on March 27 to consider approving the agreement filed today. The merger will take effect through a bankruptcy plan that hasn’t been proposed yet.

“The combination of the two airlines will result in superior value for all stakeholders,” American said in its filing.

Fort Worth, Texas-based American and US Airways, based in Tempe, Arizona, announced the merger last week. US Airways began its pursuit of a deal in January 2012, less than two months after AMR filed for bankruptcy.

The combined company would operate under the American Airlines name. US Airways Chief Executive Officer Doug Parker will be CEO of the merged company, while AMR CEO Tom Horton will be chairman through its first annual meeting.

The agreement, which has the backing of creditors holding about $1.2 billion in claims, can be terminated by either company if the merger hasn’t been consummated by Oct. 14. That deadline can be extended to Dec. 13 under certain circumstances, American said. The deadline for filing objections to the merger is March 15.

The closing of the merger and the effectiveness of American’s bankruptcy plan will occur together, American said in court papers. The carrier has an April 15 deadline for filing the reorganization plan in court. It said a plan hasn’t been negotiated with the committee representing unsecured creditors in the bankruptcy case.

The case is in re AMR Corp., 11-15463, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

To contact the reporter on this story: David McLaughlin in New York at dmclaughlin9@bloomberg.net

To contact the editor responsible for this story: John Pickering at jpickering@bloomberg.net


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