American Airlines’ merger with US Airways Group Inc. was approved by U.S. Bankruptcy Judge Sean Lane in Manhattan.
The merger is a “terrific result,” Lane said today.
Fort Worth, Texas-based American and US Airways, based in Tempe, Arizona, announced the merger in February. US Airways began its pursuit of a deal in January 2012, less than two months after American parent AMR Corp. filed for bankruptcy.
The combined company would operate under the American Airlines name. US Airways Chief Executive Officer Doug Parker will be CEO of the merged company, while AMR CEO Tom Horton will be chairman through its first annual meeting.
The agreement, which has the backing of creditors holding about $1.2 billion in claims, can be terminated by either company if the merger hasn’t been consummated by Oct. 14. That deadline can be extended to Dec. 13 under certain circumstances, American said. The deadline for filing objections to the merger is March 15.
Lane didn’t approve a $20 million severance package for Horton. He asked at the hearing today why the severance approval shouldn’t be put off until later, when American parent AMR Corp. seeks court approval for its bankruptcy reorganization plan.
“Why can’t it and why shouldn’t it be in the plan as opposed to here?” the judge said.
The case is in re AMR Corp., 11-15463, U.S. Bankruptcy Court, Southern District of New York (Manhattan).