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American Airlines-US Airways merger approved

Judge rejects AA CEO’s $20 million severance package

A U.S. bankruptcy judge has approved the merger between American Airlines (AA) and US Airways. The merger will create the world’s largest airline carrier.

AA filed for bankruptcy in 2011, and earlier this year, it announced its plans to merge with US Airways as part of its emergence from bankruptcy.

In the same ruling approving the merger, Bankruptcy Judge Sean Lane also rejected the $20 million severance package for AA CEO Tom Horton. The severance was already called into question by the U.S. government, which said it was a “golden parachute.”

Lane said the merger was “a terrific result” to AA’s bankruptcy problem, but that approving Horton’s severance was “just not appropriate.”

The merger will be finalized when a court approves AA’s bankruptcy plan, which is expected to happen within the next six months.

Read more InsideCounsel stories about AA:

American Airlines, US Airways announce $11 billion merger

American Airlines wants more time to reorganize

US Airways and American Airlines may merge soon

American Airlines labor agreement with pilots approved

American Airlines and pilots agree on labor proposal language

American Airlines pilots’ union says labor deal may be close

Court says American Airlines agents may vote to unionize

American Airlines’ bid to abandon pilots’ contracts fails

American Airlines reaches tentative contract agreement with pilots union

American Airlines’ union election temporarily blocked

American defends its lawsuit against union action

Pilots’ union sues American

 

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