Judge approves American Airlines' bankruptcy plan

| Thursday, Sept. 12, 2013, 12:42 p.m.

DALLAS — A federal judge has approved American Airlines' plan to emerge from bankruptcy protection and merge with US Airways, although the airlines must resolve a lawsuit filed by the federal government seeking to block the merger.

A trial over that lawsuit is scheduled for November.

The ruling Thursday by federal bankruptcy Judge Sean Lane in New York could restore a sense of momentum for the merger.

“The judge's ruling today shows that American is heading in the right direction,” said Mike Trevino, a spokesman for American's parent company, AMR Corp. He called it a milestone in AMR's turnaround since filing for bankruptcy protection in 2011.

The airlines had hoped to close the merger this month and form the world's biggest carrier. They're now shooting for the end of the year, if they can settle the antitrust lawsuit with the Justice Department or win the case in court.

Shares of AMR, based in Fort Worth, Texas, rose 18 cents, or 5.1 percent, to $3.69 in over-the-counter trading Thursday afternoon. Shares of Tempe, Ariz.-based US Airways Group Inc. slipped 4 cents to $17.68.

AMR lawyers had argued against delaying approval of the bankruptcy plan, saying that would put ongoing support for the merger at risk.

Lane said that if the airlines lose the antitrust case, AMR will have to write a restructuring plan that doesn't include the merger. If the airlines settle with the Justice Department, Lane would review terms of the settlement.

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