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American Airlines Creditors Committee Includes Unions, Bondholders’ Banks
American Airlines’s three largest unions and banks representing bondholders were named to the committee of unsecured creditors in the bankruptcy case of parent company AMR Corp.
Wilmington Trust (WL) Co., Manufacturers and Traders Trust Co., Bank of New York Mellon Corp. (BK), Pension Benefit Guaranty Corp., Boeing Co. (BA) and Hewlett-Packard Enterprise Services LLC were appointed today by the U.S. Trustee’s office, a Justice Department unit that monitors bankruptcies. Labor groups for pilots, flight attendants and mechanics and baggage handlers also are on the panel.
The committee selected Skadden, Arps, Slate, Meagher & Flom LLP as the law firm that will represent it during the bankruptcy.
The creditors committee represents companies and individuals owed money by AMR when it sought bankruptcy protection last week. The panel has a voice in any major decision made by the Fort Worth, Texas-based company outside of normal business while it is under court protection, including what it will look like in the future.
“The creditors committee is a key committee to be on,” said Howie Schack, a spokesman for the Allied Pilots Association, which represents 8,700 active pilots. “It’s going to play a vital role in reshaping the airline and will work directly with American management to come up with a business plan the employees can be a part of.”
AMR filed for bankruptcy on Nov. 29, saying American’s cost structure wasn’t competitive with other airlines.
Sean Collins, a spokesman for the company, didn’t have an immediate comment on the makeup of the committee.
“The U.S. bankruptcy trustee made the right call” in putting the Transport Workers Union on the committee, James C. Little, the union’s international president, said in an e-mailed statement. “Thirty-thousand TWU members are critical to the current and future operations of American Airlines and American Eagle.”
PBGC Director Josh Gotbaum said the agency, which protects pension benefits, is committed to working with American Airlines, its workers, retirees and other parties, so the company can reorganize while preserving its pension plans. American Airlines employees and retirees could lose at least $1 billion in pension benefits if the airline terminates their plans, Gotbaum said in a statement today.
In total, the three unions on the panel represent more than 48,800 American Airlines employees, plus workers at commuter carrier American Eagle.
AMR only flies Boeing aircraft in its main fleet and has hundreds of planes on order from the Chicago-based company.
“We do have experience serving on a number of bankruptcy restructurings done by U.S. airlines that also happen to be customers,” John Kvasnosky, a spokesman for Boeing Capital Corp., said in an interview. “That experience will be helpful to American as it goes through the bankruptcy process.”
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