Court allows AMR to keep reins on bankruptcy until December

NEW YORK, Thu Jul 19, 2012 – American Airlines’ bankrupt parent AMR Corp. won court approval on Thursday to extend through Dec. 28 its exclusive right to present a plan to emerge from bankruptcy.
Judge Sean Lane granted the request, which was supported by AMR Corp.’s creditors’ committee, at a hearing in U.S. Bankruptcy Court in Manhattan. The current exclusivity period was to have run out in September.
AMR went bankrupt in November, citing an untenable labor cost structure.
The extension, which blocks creditors from pushing their own proposals on how AMR should restructure its debt, comes amid efforts by US Airways Group to merge with AMR and as the American Airlines parent prepares to review a range of strategic options including potential mergers while it is in bankruptcy.
Extending the exclusivity period does not necessarily kill the prospect of a merger in bankruptcy. At the behest of its creditors, AMR is considering merger partners as part of its restructuring, and the sides could still negotiate a consensual merger deal during bankruptcy.
AMR Chief Executive Tom Horton met with US Airways CEO Doug Parker early on Thursday, and assured his counterpart that AMR’s strategic review process would be “objective” and “fact-based” and there is no pre-determined outcome, according to people familiar with the matter.
Horton said during the meeting that the company has the obligation to pursue a plan that achieves the highest value for its financial creditors and will take the necessary time to run the process, the people said. They asked not to be named because the meeting was not public.