American Airlines seeks bankruptcy plan extension to April 1
BY Staff and Wire reports
Saturday, January 12, 2013
1/12/13 at 7:00 AM
See previous stories about American Airlines and its Tulsa operations.Original Print Headline: American seeks bankruptcy plan extension
AMR Corp., parent of American Airlines, asked a judge Friday for more time to file its bankruptcy restructuring plan as the carrier weighs a possible merger with US Airways Group Inc.
American wants to extend from March 11 to April 1 its exclusive right to submit a proposal to pay creditors and emerge from court protection, the company said in a filing in U.S. Bankruptcy Court in Manhattan, N.Y.
The additional time, if approved by U.S. Bankruptcy Judge Sean Lane, would be the fifth such extension since Fort Worth-based American filed bankruptcy in November 2011. The extension would prevent rival plans from being filed in court.
In his original order last March, Lane granted AMR until Sept. 28 of last year to file a reorganization plan.
The airline said the latest extension would allow it to review with creditors "all strategic alternatives." CEO Office Tom Horton said this month that AMR expected to reach a decision on whether to merge with US Airways in a matter of weeks, Bloomberg News reported.
AMR and US Airways Group have been talking about a potential merger since late summer but have not agreed on price, each side's ownership share and who would run the company, people familiar with the situation told The Associated Press recently.
AMR's directors met Wednesday, but no news came out of the gathering.
Some analysts have speculated that AMR wants to avoid making a merger decision for as long as possible because rejecting US Airways' overtures could trigger an immediate hostile takeover bid.
Other observers have said AMR's executives could reap higher personal payouts if a merger occurred after bankruptcy.
Earlier this week, AMR's chief bankruptcy lawyer raised the chance that shareholders might get something back because of AMR's "remarkable progress" in stabilizing the business.
In most Chapter 11 cases, shareholders' value is wiped out and the company issues new stock.
An AMR spokesman cautioned that buying AMR stock is speculative and that the shares could still turn out to be worthless.
The shares, which were taken off the New York Stock Exchange but can still be traded over the counter, have gone from 36 cents to 90 cents since mid-November.
For its part, Tempe-Ariz.-based US Airways is hoping to complete a merger deal as early as this month, according to people familiar with the situation.
American was the world's biggest airline by passenger traffic as recently as 2008. But Delta Air Lines Inc. leap-frogged it by buying Northwest Airlines, and United became No. 1 in 2010 when it combined with Continental to form United Continental Holdings Inc.
AMR and US Airways had combined revenue of $37.03 billion in 2011, just behind United's $37.11 billion and ahead of Delta's $35.12 billion.