Flying High: Judge Approves AA/US Air Merger
Judge approves American Airlines-US Airways merger
BY KYLE ARNOLD World Staff Writer
Wednesday, March 27, 2013
Bankruptcy Judge Sean Lane approved the merger between American Airlines and US Airways in a hearing Wednesday afternoon, but declined to OK a proposed $20 million severance package for AA CEO Tom Horton.
The merger hearing in New York City centered mostly on the severance issue and whether it violated federal bankruptcy law that prohibits excessive payouts to insiders as their companies go through bankruptcy.
In the end, Lane decided he needed more time to consider the severance package and approved the rest of the merger without Horton’s payout.
It’s unclear for now how AMR Corp. and US Airways will respond and if they will modify the terms of Horton’s severance, ask the judge to hear more arguments or to abandon the merger altogether, which lawyers indicated was a possibility.