Washington DC Bankruptcy Attorney: American Airlines Prepares Bankruptcy Exit Strategy, Merger With US Airways

According to Bloomberg News, AMR Corp., the parent company of American Airlines, filed court documents last week to exit bankruptcy and merge with US Airways Group Inc. The merger will occur once American Airlines emerges from Chapter 11 bankruptcy.

A hearing at the US Bankruptcy Court in the Southern District of New York is expected to take place on August 15, when the bankruptcy exit plan is scheduled to be considered. “After evaluating the potential strategic alternatives, it appeared that a business combination with US Airways was the only viable option for American to consider versus emerging from bankruptcy as a standalone company,” American Airlines said in court documents.

American Airlines filed for bankruptcy in November 2011, seeking a financial restructuring. Under its merger proposal, US Airways shareholders would receive 28 percent of the combined airline, while the remaining 72 percent will go to AMR’s unsecured creditors, labor unions, shareholders and employees.

Much like a Chapter 11 bankruptcy does for a business, a Chapter 13 or Chapter 7 bankruptcy can help people by stopping collection attempts. Both filings allow a person to discharge unsecured debt, like credit card debt or medical bills, which often go unpaid when financial issues arise.

If your financial situation is a problem and you want to end collection attempts, contact our Washington DC and Maryland bankruptcy lawyer to learn more.

Judd’s Judgment: If the American Airlines bankruptcy exit plan is approved, US Airways will become the world’s largest airline.

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