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AMR Corporation Message Board

  • laloponce50 laloponce50 Nov 30, 2011 12:31 AM Flag

    AMR NEWS!!

    NEW YORK (Dow Jones)-A judge on Tuesday signed off on AMR Corp.'s (AMR) requests to keep running its business as usual, less than 12 hours after the American Airlines parent filed for Chapter 11 bankruptcy protection. Judge Sean H. Lane of U.S. Bankruptcy Court in Manhattan approved AMR's so-called first-day motions, including the right to keep paying its 88,000 employees, as well as its vendors. Lane's approvals also covered AMR's requests to maintain relationships with the suppliers of fuel for its planes, as well as to keep in place its frequent-flier club for customers. Weil, Gotshal & Manges LLP's Harvey Miller, AMR's lead bankruptcy lawyer, said in court Tuesday that a key to Chapter 11 is, "Don't wait too long. Don't wait until the course is irreversible. And that is what American is doing today." AMR filed for Chapter 11 on Tuesday morning with $24.7 billion in assets but $29.5 billion in liabilities, citing its competitive disadvantages compared to its rivals and stifling labor costs. The company said it has about $4.1 billion of cash on hand. Miller said AMR will use some of that cash to help fund it through bankruptcy, asking the court for a "seamless" transition into Chapter 11. AMR will use $50 million of that cash to pay its "critical" vendors over the next 21 days, to keep its airline running regularly. "What comes out of this hearing will affect whether this airline survives," Miller said in court Tuesday. AMR ranks third among U.S. and global airline companies by traffic, behind United Continental Holdings Inc. (UAL). The $24.7 billion in assets makes the case the 24th-largest Chapter 11 bankruptcy-protection filing since 1980, according to Bankruptcydata.com, and the second-largest airline bankruptcy behind UAL. AMR's board had been considering a possible bankruptcy filing for some time, but started making serious preparations in mid-November, after its pilots' union rejected the company's offer for a new labor contract, said people familiar with the matter. Those potential cost savings became something of a linchpin for AMR's efforts to restore profitability, and the board and top executives started to feel less confident a deal could get done outside of bankruptcy court, one of these people said. The two sides had said they planned to continue negotiations before AMR sought bankruptcy protection. (Dow Jones Daily Bankruptcy Review covers news about distressed companies and those under bankruptcy protection.) -By Joseph Checkler; Dow Jones Newswires; 212-416-2152; joseph.checkler@dowjones.com --Doug Cameron, Mike Spector and Jack Nicas contributed to this article. (END) Dow Jones NewswiresNovember 29, 2011 18:14 ET (23:14 GMT)

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