Two months after announcing its merger with US Airways Group Inc., American Airlines’ (AA) parent company has filed a plan to exit bankruptcy.
AMR Corp., which filed for bankruptcy in November 2011, said in a filing yesterday that the merger was “the only viable option for American to consider” in order to emerge from Chapter 11, Bloomberg reports. The company has already won court approval for its blockbuster $11 billion merger, which will create the world’s largest airline.
AA shareholders, creditors, employees and labor unions will own 72 percent of the combined company, with US Airways shareholders owning the remaining 28 percent. The new airline will also retain AA’s brand, paint design and Fort Worth, Texas headquarters.
One potential sticking point in the plan could be a $19.9 million severance package promised to AMR CEO Tom Horton, who will assume the role of chairman following the merger (US Airways head Doug Parker will serve as CEO). Last month a bankruptcy judge approved the merger, but rejected Horton’s severance pay, ruling that it violated a 2005 law that seeks to limit excessive corporate payouts. In this week’s filing, however, AMR asked the judge to reconsider his decision.
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