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Complete coverage of the bankruptcy proceedings and its impact on customers and the local economy
Bank Sues American Airlines Over Refinancing Bid
A trustee for investors is suing American
Tuesday, Nov 20, 2012 | Updated 10:49 AM CDT
Leaders at American Airlines say they are determined to emerge from bankruptcy as a stand-alone company
A trustee for investors owed more than $1.1 billion for notes secured by aircraft is suing American Airlines over the carrier's plan to refinance the debt at lower interest rates.
U.S. Bank Trust National Association says Fort Worth-based American is using its bankruptcy filing as a ploy to avoid early repayment charges.
The bank made the claim in a lawsuit filed Friday as part of AMR's bankruptcy case in federal court in New York.
AMR has said the fees sought by U.S. Bank could amount to hundreds of millions of dollars. It contended that in case of a voluntary bankruptcy filing, it must pay principal and earned interest but not the "make-whole" fees.
The notes were issued in 2009 and 2011 and carry annual interest rates topping 8.6 percent.
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