Nearly 18 months after filing for Chapter 11 bankruptcy, the end to American Airlines debt problems may now be in sight. After obtaining approval to merge with US Airways, American’s parent corporation has filed its final reorganization plan with the bankruptcy court.
The bankruptcy plan presented to the court late last week outlined exactly how AMR Corp. plans to move forwards and out of bankruptcy protection. Equity will be divided among creditors, labor unions, employees and shareholders; all of which will retain interest in the company as it moves into new operations under the US Airways umbrella. Valued at around $11 billion, the majority share holding goes towards current AMR stakeholders, 23.6 percent of which is allocated to union groups and 3.5 percent for current stockholders; while 28 percent will go to US Airways shareholders.
The court hearing is scheduled for May 30, while still waiting on approval from US Airways shareholders, the Department of Justice and the final decision of the bankruptcy judge.