AMR says bankruptcy court should OK merger plan

Published on NewsOK Modified: August 23, 2013 at 5:02 pm •  Published: August 23, 2013

DALLAS (AP) — Lawyers for American Airlines said Friday that the company's plan to merge with US Airways and exit bankruptcy is sound and shouldn't be delayed by a government lawsuit against the merger.

American's parent, AMR Corp., hoped to close the merger and exit Chapter 11 protection next month. But the U.S. Justice Department upended that schedule last week by suing to stop the merger, which it says will hurt competition and cause airfares and fees to rise. That case is expected to go to trial late this year or early in 2014.

The lawsuit caused the judge in AMR's bankruptcy case, Sean Lane of New York, to delay a decision on the reorganization plan until next Thursday.

AMR lawyers said in a filing Friday that if the merger is blocked, the reorganization plan would be withdrawn. If there's a settlement, they said, they would bring the terms to Lane for approval.

The Justice Department weighed in with the judge too, saying that it had no opinion on the bankruptcy case but adding that a big, complex antitrust lawsuit "can take a significant amount of time to litigate."

That's not what the airlines want to hear.

They are pushing for an early date and quick trial in the antitrust case, which will be heard by a different federal judge, Colleen Kollar-Kotelly in Washington, D.C.