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Judge says American can't end retiree benefits yet

Published on NewsOK Modified: April 18, 2014 at 5:23 pm •  Published: April 18, 2014

DALLAS (AP) — A federal judge has rejected an attempt by American Airlines to quickly cut off benefits for many of its retirees.

American wants retirees who wish to keep their benefits to pay all the cost. Now the dispute could go to negotiations or a trial.

On Friday, U.S. Bankruptcy Court Judge Sean Lane in New York rejected a request made by American's former parent, AMR Corp., for the right to immediately eliminate retiree benefits for former pilots, flight attendants and other union workers. Lane granted AMR's request for a group of nonunion workers.

The company had 46,930 retirees when it filed for bankruptcy protection in 2011.

American was left to ponder its next move.

"American will review his ruling and consider next steps related to the retiree health and life insurance benefits," American spokesman Casey Norton said in an emailed statement. "We always remain open to productive discussions to finally resolve this matter."

Catherine Steege, a lawyer for the committee representing the retirees, said the ruling should cause American to stop trying to terminate the benefits.

AMR emerged from Chapter 11 protection last December as American Airlines Group Inc. after merging with US Airways. Creditors were repaid in full and AMR shareholders received stock in the new company — both unusual events in a bankruptcy case.

Steege said that while the judge didn't consider the successful reorganization in his ruling, "morally it ought to make a difference. These people worked long and hard and loyally for American Airlines and they made it into the airline it has become," she said in an interview. "They should share in the prosperity."

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