AMR Submits Formal Plan to Exit Bankruptcy

AMR, the parent company of American Airlines, filed its formal plans to exit bankruptcy late Monday, bringing its proposed $11 billion merger with the US Airways Group closer to reality. Add to Portfolio US Airways Group Inc Go to your Portfolio » The reorganization plan, which details some executive compensation and outlines measures for creditors and shareholders, is a necessary step before the two companies can come together to create the world’s largest airline. The plan requires both court and creditor approval. Under the plan, AMR’s departing chief executive, Thomas W. Horton, would receive a $19.9 million severance package. Earlier this month in Federal Bankruptcy Court, Judge Sean H. Lane declined to approve the severance proposal, ruling that it was not permitted under federal bankruptcy law. But the judge suggested that the severance proposal be included in AMR’s reorganization plan, making it subject to creditor approval. Secured creditors would be paid in full, while unsecured creditors would receive shares of preferred stock. As expected, AMR shareholders would receive a 3.5 percent equity stake in the combined company. As such, this would be one of the few major bankruptcies in which shareholders recovered some equity. A lawyer for AMR’s creditors committee has said the stake could be valued at $350 million to $400 million. read more at: http://www.nytimes.com/2013/04/16/business/amr-submits-formal-plan-to-exit-bankruptcy.html?ref=bankruptcies