AMR Seeks to Extend Exclusive Right to File Exit Plan
Stock Chart for AMR Corp (AAMRQ)
American Airlines parent AMR Corp. (AAMRQ) is seeking court approval to extend the deadline for filing a plan to restructure and exit bankruptcy as US Airways Group Inc. (LCC) pushes for a merger of the carriers.
American wants to extend its exclusive right to submit a reorganization plan in court to March 11 from Jan. 28, according to a filing today in U.S. Bankruptcy Court in Manhattan.
The Fort Worth, Texas-based airline, which has agreed to share information with US Airways, said it’s refining its business plan and working with creditors on a “collaborative review of strategic alternatives.”
“American has made significant progress in its restructuring,” Sean Collins, a spokesman for the company, said in a statement today. “This work, while progressing well, takes time.”
The request came the day after American marked its one-year anniversary in bankruptcy. The extension, which is supported by the committee representing unsecured creditors in the bankruptcy case, would prevent others from filing rival plans in court and maintain the carrier’s control over its restructuring.
U.S. Bankruptcy Judge Sean Lane is scheduled to consider the request at a Dec. 19 hearing.
American has exchanged information with Tempe, Arizona- based US Airways under a nondisclosure agreement. AMR has said it prefers to leave bankruptcy as an independent company, while US Airways backs a tie-up.
US Airways made its case for a merger to American’s creditors committee on Nov. 13, according to three people familiar with the matter. The committee, which includes unions and bondholder representatives, has an influential voice in the bankruptcy proceeding.
“Knowing that US Airways is in discussion with the parties, we take this extension of exclusivity request as a positive sign that things are proceeding in a productive manner,” Dennis Tajer, a spokesman for American’s pilots union, said today in a statement.
AMR’s $460 million of 6.25 percent convertible notes due October 2014 rose 6 cents to 78 cents on the dollar, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The notes traded at 17.75 cents after AMR’s bankruptcy filing. US Airways shares fell 11 cents to $12.89 in New York trading.
A combination of US Airways, the fifth-biggest U.S. airline, and No. 3 American would create the world’s largest carrier by passenger traffic, surpassing United Continental Holdings Inc. (UAL) and Delta Air Lines Inc. (DAL)
John McDonald, a US Airways spokesman, declined to comment on American’s request for more time to file its plan.
The case is in re AMR Corp., 11-15463, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
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