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AMR Judge to Rule on Merger Accord Tomorrow, Lawyer Says

AMR's American Airlines & US Airways
An AMR Corp.'s American Airlines airplane, left, and a US Airways Group Inc. airplane sit parked at a gate at Dallas Fort Worth Airport in Fort Worth, Texas, on Feb. 14, 2013. Photographer: Mike Fuentes/Bloomberg

AMR Corp. will learn tomorrow whether a bankruptcy judge has approved its settlement of a U.S. Justice Department lawsuit over the proposed merger of American Airlines and US Airways Group Inc., a company lawyer said.

U.S. Bankruptcy Judge Sean Lane scheduled a hearing for 10 a.m. in Manhattan to issue his ruling, Stephen Karotkin, a lawyer for American Airlines parent AMR, said in a phone interview today.

Lane heard arguments yesterday from supporters and opponents of the merger, which would create the world’s biggest airline. The judge said he wanted to rule this week so he wouldn’t have to deal with the matter over the Thanksgiving holiday.

The Justice Department filed an antitrust lawsuit to block the merger in August, arguing the deal would raise prices and harm consumers. American Airlines and US Airways said the combination would give travelers more choices and generate more than $500 million a year in benefits.

Under the Nov. 12 accord, the Justice Department agreed to drop its challenge if the carriers gave up some airport slots. The federal district judge presiding over the antitrust case in Washington must also approve the proposed settlement after accepting public comments through Feb. 7.

The deal with Tempe, Arizona-based US Airways is the linchpin of Fort Worth, Texas-based American’s bid to emerge from bankruptcy after almost two years and repay creditors. Lane approved American’s reorganization plan in September, while barring it from taking effect until the underlying merger won regulatory clearance.

The bankruptcy case is In re AMR Corp., 11-bk-15463, U.S. Bankruptcy Court, Southern District of New York (Manhattan). The antitrust case is U.S. v. US Airways Group Inc., 13-cv-01236, U.S. District Court, District of Columbia (Washington).

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