An American Airlines passenger jet glides in under the moon as it lands at LaGuardia airport in New YorkNew York, August 28, 2012.
Credit: Reuters/Eduardo MunozBy Nick BrownNEW YORK | Fri Aug 23, 2013 4:43pm EDT
NEW YORK (Reuters) - American Airlines and its creditors' committee on Friday urged a bankruptcy judge to approve the airline's restructuring plan despite an antitrust challenge from the Department of Justice.
In court papers filed in U.S. Bankruptcy Court in Manhattan, American's bankrupt parent, AMR Corp (AAMRQ.PK), said failing to approve the restructuring would add "a destabilizing factor" to its proposal to merge with US Airways Group (LCC.N) and pay back creditors.
AMR's creditors' committee, in a separate filing, said refusal by Judge Sean Lane to give the plan his blessing could threaten creditor support for the plan, which includes AMR's unions and most of its creditors.
"While the DOJ enforcement action has unsettled creditor and stockholder expectations, deferring entry of the confirmation order ... would only exacerbate this uncertainty," the committee said.
The U.S. government also filed a brief on Friday, but did not, as might have been expected, urge Lane to not approve the restructuring plan. Instead the government, through U.S. Attorney Preet Bharara, said it took "no position as to whether" Lane should confirm the plan, but cited the "attendant risk that a confirmed plan may not be able to become effective for a considerable time, if at all."
AMR and US Airways agreed to merge in February in an $11 billion deal that would end AMR's bankruptcy and create the world's largest airline. Experts had expected the deal to enjoy a smooth ride through the regulatory process.
But on August 13, two days before the restructuring plan was to gain final court approval, the DOJ sought to block it, filing a lawsuit in Washington, D.C., alleging a stifling of competition that would harm consumers though higher fares.
Judge Lane, overseeing AMR's bankruptcy in New York, held off confirming the plan in the face of the DOJ's lawsuit, giving the parties until Friday to brief him on the best course of action.
AMR, in its court papers, stressed that the merger agreement, which Lane already approved, contains "a mechanism" to account for this very scenario. If the parties cannot obtain regulatory approval, the deal would eventually be terminated, AMR said.
Lane voiced hesitation to rubber-stamp a deal that might later change due to a settlement with the DOJ. But AMR said future changes to the plan, namely divestitures, are expressly required to go back before Lane for approval.
The creditors' committee said Lane's job is to make sure the plan meets standards under the bankruptcy law. Worrying about antitrust concerns is the DOJ's job.
"They are separate processes, before different courts, and on different schedules," the committee said.
If the Justice Department ultimately succeeds in blocking the merger, it would put AMR's restructuring back at square one, requiring it to forge new strategies for paying back creditors.
AMR shareholders, who stand to receive a 3.5 percent stake in the new entity under the merger, would likely be wiped out under any plan that excludes a merger, restructuring experts have said.
AMR's unions also support a merger. The Transport Workers Union, representing ground crew members, on Thursday filed court papers urging Lane to approve the deal.
But not everyone is in favor of Lane signing off. A group of plaintiffs in a separate antitrust lawsuit against US Airways filed a brief on Thursday in AMR's bankruptcy, saying the judge cannot under bankruptcy law confirm a plan that may prove not to be feasible. AMR appears "unable to articulate a ‘Plan B' which would resolve" antitrust risks, the group said in its filing.
Regardless of Lane's decision, the issue will come down to the sides' ability to resolve matters with the DOJ. Chapter 11 merger plans require both bankruptcy court approval and regulatory approval, and one does not impact the other.
At a hearing last week, Lane did not seem opposed to the restructuring plan on its face, his hesitation instead rooted in concerns that the deal he was being asked to approve might look different a few months down the road.
The DOJ antitrust suit will take months to resolve, and possibly longer if it goes to trial.
(Reporting by Nick Brown; Editing by Tim Dobbyn)
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A model of the Solara 50, Titan Aerospace's commercial "atmospheric satellite," hangs above the company's booth at the AUVSI Unmanned Systems conference booth.
A model of Boeing's Phantom Eye at Boeing's AUVSA conference booth.
Enlarge / Artist's rendering of Solara 50 at high altitude.
Enlarge / The coverage area of a Solara 50, superimposed over New York.
David Walliams' (second right) love of old fashioned British humour comes to the fore in Big School, a sitcom with a stellar cast including (left to right) Philip Glenister, Catherine Tate and Frances De La Tour
Big School opens with a rush of warmth and sympathy for old-fashioned teaching methods. Walliams plays a chemistry teacher who is down on his luck
David Walliams played a disgruntled teacher in his sketch show Little Britain with every teacher's worst nightmare Vicky Pollard, played by Matt Lucas. It's clear from both shows that Walliams has a great sympathy for teachers, but not students
In recent years, Walliams has been spent more time judging on Britain's Got Talent that creating comedy
Peter Sarsgaard is terrific as Lovelace's scumbag of a husband. Amanda Seyfried delivers a gutsy performance as the naive Lindalovelace
The film has elements of a cautionary tale and tells a thoroughly grim tale_taboola.push({mode: 'autosized-generated-text-under-1r-us', container: 'taboola-below-main-column', placement: 'below-main-column'});_taboola.push({flush:true});DM.BC.videoAdServerUrl = "http://pubads.g.doubleclick.net/gampad/ads?sz=8x8&iu=%2F7023%2Fdm.video%2Fdm_video_tvshowbiz&ciu_szs=&impl=s&gdfp_req=1&env=vp&output=xml_vast2&unviewed_position_start=1&url=[referrer_url]&correlator=[timestamp]";if (window.ArticlePage && MobileUtils.isMobile()) {new ArticlePage();} _cc991.bcp();
Bowing out: Carol McGiffin has quit her ten year presenting role on ITV daytime show Loose Women
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Bit of a gap: Carol McGiffin with fiance Mark Cassidy, who is 23-years her junior
Fancying his chances: TOWIE star Mario Falcone has developed a crush on fellow Celebrity Big Brother housemate Carol McGiffin
Under threat: Carol McGiffin has quit Loose Women, but her fellow panelist have reportedly given short term contracts following a steep decline in viewing figures during the last series_taboola.push({mode: 'autosized-generated-text-under-1r-us', container: 'taboola-below-main-column', placement: 'below-main-column'});_taboola.push({flush:true});DM.BC.videoAdServerUrl = "http://pubads.g.doubleclick.net/gampad/ads?sz=8x8&iu=%2F7023%2Fdm.video%2Fdm_video_tvshowbiz&ciu_szs=&impl=s&gdfp_req=1&env=vp&output=xml_vast2&unviewed_position_start=1&url=[referrer_url]&correlator=[timestamp]";if (window.ArticlePage && MobileUtils.isMobile()) {new ArticlePage();} _cc991.bcp();
King of the ocean: Connor Cruise tries his hand at paddle-boarding during the Oakley Learn to Ride event in Los Angeles on Saturday
Floundering: Connor clambers onto his paddle board during an outing on the choppy Pacific waters for the Oakley Learn to Ride event
This is how you do it: Connor, 18, is on hand to give pretty actress Annet Mahendru a few pointers
Seeing the funny side: Something's tickled Annet as she attempts to paddle-board on Saturday
Washed up: Annet makes her way out of the choppy pacific waters on Saturday _taboola.push({mode: 'autosized-generated-text-under-1r-us', container: 'taboola-below-main-column', placement: 'below-main-column'});_taboola.push({flush:true});DM.BC.videoAdServerUrl = "http://pubads.g.doubleclick.net/gampad/ads?sz=8x8&iu=%2F7023%2Fdm.video%2Fdm_video_tvshowbiz&ciu_szs=&impl=s&gdfp_req=1&env=vp&output=xml_vast2&unviewed_position_start=1&url=[referrer_url]&correlator=[timestamp]";if (window.ArticlePage && MobileUtils.isMobile()) {new ArticlePage();} _cc991.bcp();
Enlarge / The packaging creates its own cup.
The outstanding performance from six-year-old Onata Aprile as Julianne Moore and Steve Coogan's daughter is worthy of an Oscar
The thoughtful look at modern family structures explores the damage done by divorce and selfish parents_taboola.push({mode: 'autosized-generated-text-under-1r-us', container: 'taboola-below-main-column', placement: 'below-main-column'});_taboola.push({flush:true});DM.BC.videoAdServerUrl = "http://pubads.g.doubleclick.net/gampad/ads?sz=8x8&iu=%2F7023%2Fdm.video%2Fdm_video_tvshowbiz&ciu_szs=&impl=s&gdfp_req=1&env=vp&output=xml_vast2&unviewed_position_start=1&url=[referrer_url]&correlator=[timestamp]";if (window.ArticlePage && MobileUtils.isMobile()) {new ArticlePage();} _cc991.bcp();
Coastline of the Faroe Islands.
Deep and meaningless: Celebrity Big Brother has achieved the not inconsiderable feat of taking series even more downmarket than usual this year‘So is it a big one ?’ Spencer demanded eagerly, an issue he probably pursues more typically of men.He didn’t stop there either. (If only...)‘How long have you had your vagina ?’ he persisted, on learning that Harries had been celibate for six years. ‘15 years,’ came the reply. ‘So it has been used then...’ Spence deduced, his curiosity satiated.No doubt this was the kind of conversation the inventors of television imagined when they were working so hard. There is now the very real possibility that Harries’ vagina will be a close second to the infamous appearance on Wogan 25 years ago as what she is remembered for.. Hopefully, this will be more than the fame-hungry, bitter monster that is Louie Spence, who seems to think being gay makes him fascinating – that and doing the splits.
Plastic fantastic: American star Courtney Stodden provided any women considering breast implants with an invaluable piece of advice on how to maintain them: wearing a bra
Frank discussions: The house have had conversations ranging from boob jobs to racism. Louie Spence (right) meanwhile can do the splitsNever one to be outdone, the diary room found Geordie Shore’s Charlotte Crosby confirming she’d had a good day. ‘I made some bread !’ she enthused, going to far as to claim that ‘being in the Big Brother house is turning me into a good wife.’This, she elaborated, was because she was learning to do the boring chores the role needs, explaining that she was already an expert in the main requirement for being a good wife: oral sex. Gulp. The days of young ladies being sent to Swiss finishing schools to learn how to walk around with books on their head maybe over.
From left to right: CBB-ies' 'Cult of Celebrity': former model and cocaine addict Sophie Anderton, former child prodigy and transsexual Lauren Harries and Louie Spence, who can do the splits Charlotte Crosby didn’t care either way.‘I could just watch her old day,’ she swooned. ‘She’s like the drawings I used to do – when you draw boobs on stick men to show it’s a woman. She’s like a human stick woman !’Genius - in a way.
Stop the madness: Harries (left), Anderton (centre) and Spence (irritant) dress up as 'the Cult Of Celebrity' - probably the only organisation that would have them
Probing: Sophie Anderton (left) pretends she's not looking at Courtney Stodden's breasts and wondering if they're realWe were also treated to the sight of Lauren Harries expounding about ‘the pitfalls of fame’, as if that appearance on Wogan was only yesterday, not 25 years ago.This speech was made to Sophie Anderton who expertly steered the conversation on to her favourite subject – herself – alluding to her demise by declaring: ‘thankfully I’m back in a very strong position again’, ignoring any impression that appearing on Celebrity Big Brother might suggest this position wasn’t that strong. The final moment of madness came when Big Brother called Carol McGiffin to the diary room to censure her for explaining to Louie Spence why Ron Atkinson’s career as a football pundit had ended in disgrace, and citing the exact racial epithet that he had used.She was issued an official warning, despite the fact that McGiffin’s repetition of the offensive quote had not been heard by viewers because it was bleeped out.Nonetheless, Big Brother told her it regarded the language as ‘offensive’, before promptly using the word ‘n****r’ too, this time openly for all to hear.