Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comFirm Insights
American Airlines Wins Court Approval to Exit Bankruptcy
Author: Joel R. Glucksman
Date: September 26, 2013
Key Contacts
Back
A federal bankruptcy judge has approved American Airlines’ reorganization plan, as well as its merger with US Airways, the latter contingent upon the outcome of the U.S. Department of Justice’s antitrust lawsuit.
U.S. Bankruptcy Judge Sean Lane said that American Airlines’ arguments were persuasive and that the broad support the plan had garnered from AMR Corp, its unsecured creditors committee, and American’s labor unions “could be put at risk if the confirmation is delayed,” the Philadelphia Inquirer reports. Lane, who had previously expressed concerns about permitting the company to exit proceedings following the Justice Department’s antitrust challenge, said that his job was to determine whether the bankruptcy plan meets the standards of feasibility set forth under the bankruptcy law, regardless of separate lawsuits such as that by the Justice Department..
“The question is whether [the plan] will succeed once consummated, not whether it will be consummated,” said Lane. “Here, there can be no dispute that the plan is feasible, if allowed to proceed.”
While Lane’s ruling will allow the company to formally exit bankruptcy proceedings, the judge did strike down a provision that would pay AMR’s outgoing chief executive Tom Horton a $19.9 million severance package. The Justice Department has argued that the severance deal violates bankruptcy law. However, a severance deal may still be approved by AMR’s board of directors after the merger takes place.
The antitrust case brought by the Justice Department will go to trial November 25, and the outcome of the case will affect whether American Airlines is permitted to move forward with a merger that has the support of creditors and the European Commission. If that court rules against the merger, or any material changes take place in a settlement with the Justice Department, American’s plan to exit Chapter 11 bankruptcy law protection would go back to Judge Lane, who has said that no merger can take place in the absence of regulatory approval.
- Practices: Corporate Transactions & Business, Bankruptcy & Creditors' Rights, Bankruptcy Litigation
- Locations: Red Bank, NJ, New York City, Little Falls, NJ
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
You Just Received a Federal Grand Jury Subpoena in New Jersey: Now What?
Receiving a federal grand jury subpoena is not something most businesses or individuals anticipate. While it can be concerning, a federal grand jury subpoena does not necessarily mean that you are being accused of wrongdoing. It does, however, mean that a federal criminal investigation is underway and that federal prosecutors believe you may possess information […]
Author: George McGowan
Why Every Business Should Conduct an Annual Insurance Coverage Review
Most New Jersey business owners purchase insurance policies, file them away, and assume they are protected if a claim arises. Without a regular insurance coverage review, many companies discover gaps only after a lawsuit, cyberattack, property loss, or other significant event occurs. An annual insurance coverage review can help businesses identify potential risks, ensure their […]
Author: George McGowan
Demand Letters & Cease and Desist Letters: When to Send One (and When Not To)
Businesses and individuals often encounter situations where another party breaches a contract, fails to pay a debt, or continues harmful conduct. In many such disputes, a precisely drafted demand letter or cease-and-desist letter serves as a powerful legal tool. It can frequently resolve the dispute and avoid litigation. While demand or cease-and-desist letters can resolve […]
Author: George McGowan
How to Effectively Use Contracts to Manage Risk
Key provisions in your contracts, including those relating to indemnification, insurance, and defense, are essential to contract risk management. While sometimes considered “boilerplate,” these provisions play a pivotal role when determining which party is responsible for certain costs and liabilities. They must always be negotiated and drafted carefully. Indemnification Clauses Businesses should never overlook the […]
Author: George McGowan
Understanding Portability for Estate and Gift Tax
Portability of estate and gift tax enables a surviving spouse to inherit any unused portion of their deceased spouse’s federal estate and gift tax exemption. So, if one spouse doesn’t utilize their full exemption, the surviving spouse can effectively double their exemption amount with regard to estate tax liability. For married couples, portability offers a […]
Author: Marc J. Comer
Pet Trusts in New Jersey and New York: A Practical Estate Planning Tool
For many of us, pets are more than companions—they are members of the family. Yet they are often overlooked or inadequately provided for when it comes to estate planning. A pet trust offers a legally enforceable way to ensure that your animal continues to receive proper care if you become incapacitated or pass away. As […]
Author: Marc J. Comer
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.