AMR seeks to extend control of bankruptcy by 30 days
NEW YORK (Reuters) - AMR Corp (AAMRQ.PK) on Tuesday asked a bankruptcy judge for a 30-day extension, through January 28, of its exclusive period to file a plan to exit bankruptcy.
In court papers filed jointly with its creditors' committee, the American Airlines parent asked to extend the period during which creditors cannot pursue their own restructuring plans for the airline.
AMR declared bankruptcy last November amid high labor costs. It has said it wants to exit bankruptcy as a standalone firm. But smaller competitor US Airways Group LCC.N is pushing hard to acquire AMR while it is still under Chapter 11 protection.
During so-called exclusivity periods, bankrupt companies retain control over proposing a plan to exit bankruptcy, and creditors are not allowed to pursue competing plans. In AMR's case, that means any acquisition plan involving US Airways or any other firm would require AMR's consent.
US Airways and several other firms recently signed non-disclosure agreements to explore various strategies for AMR to exit bankruptcy, including both merger and standalone options.
Tuesday's extension request suggests no deal is imminent. That AMR and its creditors' committee joined forces on the request, however, suggests discussions are generally cooperative.
"Substantial good faith progress has been made in a collaborative, cooperative, viable working relationship with the (creditors' committee)," AMR said in the court filing.
Sean Collins, a spokesman for AMR, said the task of developing an exit strategy is "progressing well" but that it "takes time."
"American and the (creditors' committee) believe that the proposed 30-day extension is appropriate for this process to continue in an orderly and efficient manner," Collins said.
An attorney for the creditors' committee declined to comment. A spokeswoman for US Airways did not have an immediate comment. A hearing on the extension motion is slated for October 30 in U.S. Bankruptcy Court in Manhattan.
In the filing, AMR attributed the extension request in part to its continuing efforts to achieve labor peace with its unions, which have taken priority in its restructuring.
While it has reached deals with two of its three work groups, it remains locked in a bitter dispute with its pilots, and said in the court filing that those "time- and resource-demanding" negotiations mean AMR needs more time to come up with a bankruptcy exit plan.
The pilots' union, the Allied Pilots Association, supports a merger with US Airways. A spokesman for APA said the group sees the extension request as "a positive" development in merger talks.
"We assume that those discussions are functional, and the sign of extending the exclusivity period is a symbol that things are proceeding in a positive way," APA spokesman Dennis Tajer told Reuters.
The case is In re AMR Corp et al, U.S. Bankruptcy Court, Southern District of New York, No. 11-15463.
(Reporting By Nick Brown; editing by John Wallace)