American Airlines bankruptcy trustee challenges outgoing CEO’s severance

The U.S. trustee in AMR Corp.’s Chapter 11 bankruptcy case has objected to American Airlines CEO Tom Horton’s $19.8 million severance payment, arguing that the company hasn’t explained why such a large sum is permissible under federal bankruptcy rules. Horton’s compensation is addressed as part of the company’s merger agreement with US Airways, which calls for Horton to become chairman of the combined company until its first shareholders meeting, expected in mid-2014. US Airways CEO Doug Parker will be chief executive of the combined carrier. The U.S. trustee in such cases supervises the debtor’s administration. That includes monitoring financial reporting and also compensation and reimbursements, according to a description by the administrative office of U.S. Courts. However, it is the bankruptcy judge who decides on motions before the court. Bankruptcy Judge Sean Lane is scheduled to rule on the merger and Horton’s severance package at a March 27 hearing. Friday was the deadline for objections in those matters. Read more at http://skift.com/2013/03/16/american-airlines-bankruptcy-trustee-challenges-outgoing-ceos-severance/