AMR submits $2.34 million in March bankruptcy costs to court
BY D.R. STEWART World Staff Writer
Tuesday, May 01, 2012
5/01/12 at 4:35 AM
See previous stories about American Airlines and its Tulsa operations.
Advisers and consultants of AMR Corp. filed $2.34 million in monthly compensation statements on Monday in U.S. Bankruptcy Court for the Southern District of New York, court documents show.
The monthly bills are for services to AMR, the parent of American Airlines, for auditing, tax consulting, management restructuring and employee benefits, court filings show.
The largest bill, for $1.38 million, was submitted by the Boston Consulting Group Inc., AMR's management restructuring consultants, for services rendered from March 1 to March 31.
The Boston Consulting Group is assisting AMR's management in redesigning and realigning the company's management structure.
Court filings by AMR show that BCG will help the company "ensure that the right management teams are working on the right tasks; design a management structure that fosters accountability and high performance, adaptability and fast, effective decision making; and create an efficient cost structure."
AMR says the management restructuring project will take 32 weeks to complete for all layers of management.
In bankruptcy court last week, lawyers for AMR presented their case for the rejection of American's collective bargaining agreements with its unionized mechanics, pilots and flight attendants.
AMR says American must cut 13,000 workers and slash wage and benefit costs by $1.25 billion a year to emerge from bankruptcy as a competitive airline.
Two major cuts were proposed.
First, $990 million a year in wages and benefits from the three unions, according to court documents.
And second, $165 million a year from management and support staff, court documents say.
KPMG LLP, AMR's tax compliance and tax consultants, submitted for the court's approval a $441,730 bill for services performed between March 1 and March 31.
KPMG is assisting AMR with analysis of the tax implications of various reorganization scenarios, analysis of potential bad debt, analysis of the tax implications of any potential merger as well as preparation of income tax returns in the 50 countries in which American does business and the 50 U.S. states.
Groom Law Group, AMR's employee benefits adviser, submitted a $335,999 bill for its services between March 1 and March 31.
Groom is assisting AMR with employee benefit obligations under federal law and any investigations, inquiries or claims related to the plans by federal agencies or the United States Trustee, court filings show.
Ernst & Young LLP, AMR's auditor, submitted a $182,100 compensation statement for the period March 1 to March 31.
Ernst & Young is responsible for review of financial statements for AMR, American and American Eagle, American's regional airline affiliate.
After posting more than $10 billion in losses during the last 10 years, AMR filed for Chapter 11 bankruptcy protection from creditors on Nov. 29.
AMR Corp.’s bills for advisers and consultants in March
• Boston Consulting Group
Inc.: $1,381,600, management
• KPMG LLP: $441,730, tax
• Groom Law Group:
$335,999, employee benefits
• Ernst &
Sources: AMR Corp., U.S. Bankruptcy
Court for the Southern District of New York
Original Print Headline: AMR advisers file bills for March
D.R. Stewart 918-581-8451