Coverage of the merger between American Airlines and US Airways

Judge Approves AA Bankruptcy Plan

Bankruptcy plan approval contingent upon government lawsuit

By David Koenig
|  Thursday, Sep 12, 2013  |  Updated 10:40 PM CDT
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Today's ruling by federal bankruptcy court in New York provides at least the perception that the merger between Fort Worth-based American Airlines and US Airways is moving forward. But first the airlines must resolve their lawsuit with the federal government.

Scott Gordon, NBC 5 News

Today's ruling by federal bankruptcy court in New York provides at least the perception that the merger between Fort Worth-based American Airlines and US Airways is moving forward. But first the airlines must resolve their lawsuit with the federal government.

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A federal judge has approved American Airlines' plan to emerge from bankruptcy protection and merge with US Airways, although the airlines must still resolve a lawsuit filed by the federal government seeking to block the merger.

A trial over that lawsuit is scheduled for November.

Thursday's ruling by federal bankruptcy Judge Sean Lane in New York provides at least the perception that the merger is still moving forward.

The airlines had originally hoped to close the merger this month and create the world's biggest carrier. They're now shooting for the end of the year, if they can either settle the antitrust lawsuit with the U.S. Justice Department or win the case in court.

Last month, Lane openly wondered whether he could approve American's reorganization plan before the merger won regulatory approval. On Thursday, he said he could if the turnaround plan looked financially sound.

AMR lawyers had argued that delaying approval of the plan would put ongoing support for the merger plan at risk

Lane said that if the airlines lose the antitrust case, American parent AMR Corp. will have to write a new restructuring plan that doesn't include the merger. If the airlines settle with the Justice Department -- perhaps by giving up takeoff and landing slots at Reagan National Airport outside Washington -- Lane would review terms of the settlement.

 

NBC 5's Scott Gordon will be covering the events of a Sept. 12 hearing on the merger. Use the Twitter widget below to see updates or follow Scott @ScottGordonNBC5.


American Airlines Merger:
Complete coverage of the merger between American Airlines and US Airways into the newly-formed Fort Worth-based company, American Airlines Group (AAL). Click here for more.

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