American Airlines has been in the news recently for its plan to merge with US Airways and for its bankruptcy filing which originally took place 18 months ago. To be granted the ability to move the company in this direction a number of clearings were needed from the court. Another one of these was given on Tuesday, when a federal bankruptcy judge decided to allow the CEO to be paid a severance package of almost $20 million. This was originally objected to by the U.S. Trustee but the decision was overruled. While the award was kept in the plan for now, there is the potential that it could be voted out later. The company will also now have to gain approval from creditors to be able to exit Chapter 11 bankruptcy and make the merge official.
The plan will be voted on once brought to creditors. The date for the vote has yet to be determined, but the airline companies have proposed having the vote finished by the end of July and the court hearing in mid-August. The merger of US Airways and American Airlines will make it the largest airline and the plan is expected to cost around $11 billion. The new company will be known as American Airlines Group Inc. and its base will be located in Fort Worth, Texas. If the plan is approved then it is possible that the company will be able to exit bankruptcy court around the end of the summer. They are hoping that through the reorganization plan they will be able to develop a stronger foundation for the health of the company and increase the benefits for stakeholders. The final outcome is anticipated to see how bankruptcy allowed this company to start over. If you are dealing with debt, whether it is personal or from a business, contact our Long Island bankruptcy lawyer to find out how bankruptcy may be able to help you.