AMR cites possibility of equity value in Chapter 11 case
Jan 8 (Reuters) - AMR Corp, the parent of American Airlines, said its business prospects have improved to the point equity holders might receive some value from its Chapter 11 reorganization.
AMR, which filed for bankruptcy in November 2011, is weighing merging with rival US Airways Group Inc against exiting Chapter 11 as a standalone company.
When companies go bankrupt, their stock is usually wiped out. AMR originally opposed the appointment of an equity committee in its Chapter 11 case because of an initial view that shareholders did not stand much chance of recovering anything meaningful.
But in a Jan. 3 letter to the U.S. Justice Department, made public in a federal filing on Tuesday, AMR cited a "change in circumstances concerning the potential economic interests of AMR equity holders."
The letter, written by AMR attorney Harvey Miller, says the carrier has made progress over the past year and its value has "significantly appreciated."
The case is In re AMR Corp et al, U.S. Bankruptcy Court, Southern District of New York, No. 11-15463.