Aug 22 American Airlines and US
Airways are seeking a 10-day trial that would begin Nov.
12 in U.S. federal court to fight the challenge by the U.S.
Justice Department to their proposed merger, which would form
the world's biggest carrier.
In a court filing on Thursday, the carriers said the
proposed date would give the Justice Department 90 days of trial
preparation. By contrast, the 180 days requested by the
government would be "far longer than any of its other merger
trials in the century," the filing added.
The bankruptcy status of American, which has been operating
under Chapter 11 protection since late 2011, adds to the
airlines' urgency to have the lawsuit heard, the airlines stated
in their filing. The merger would be the mechanism by which
American parent AMR Corp exits bankruptcy.
The Justice Department sued last week to block the merger,
saying it would reduce competition and lead to higher airfares.
US Airways, based in Tempe, Arizona, and American, based in
Fort Worth, Texas, have vowed a vigorous defense of the merger,
which would cap recent industry consolidation that has help put
U.S. airlines on a more solid financial footing.
The carriers included information in their filing showing
that other U.S. government merger challenges took 17 days to 106
days from filing of a complaint to the start of trial.
For example, 55 days elapsed between the filing and first
day of trial of an antitrust lawsuit by the Federal Trade
Commission against Whole Foods Market Inc in 2007,
according to a table in the carriers' filing. Whole Foods later
settled the lawsuit.
MERGER TERMINATION CLAUSE
The carriers "face unusual and pronounced burdens while they
await their day in court," the filing said. The document also
added that the merger accord includes a termination clause that
would allow either carrier to end the deal as of Dec. 13.
American and its creditors face a deadline on Friday to file
briefs on why a judge should confirm American's bankruptcy exit
plan despite the Justice Department's challenge to the merger.
Judge Sean Lane, in U.S. Bankruptcy Court in New York, last
week refused to sign off on the plan, citing the Justice
Department's opposition. He gave parties until Friday to file
briefs on the best course of action.
AMR, its unsecured creditors committee, and its three
primary unions all favor the tie-up. Already one union,
representing groundworkers, has filed papers urging Lane to
approve, saying the Justice Department's lawsuit is not relevant
to whether the plan can or should receive a judge's blessing.
"Confirming the plan at this juncture will satisfy one of
the most fundamental and important conditions precedent to the
effectiveness of the plan," the Transport Workers' Union said in
AMR and its creditors committee each plan to file papers on
Friday. US Airways will not file a brief, according to a source
close to the matter.
Chapter 11 restructuring plans must gain approval by
bankruptcy judges, and must also meet a number of other
conditions specific to the plan being proposed. In AMR's case,
one of those conditions is regulatory approval.
AMR and the creditors committee will argue that, due to that
condition, Lane is free to confirm the plan, because his
approval would not trigger implementation of the merger, said
the source, who declined to be named because discussions are
Rather, Lane's approval would allow the parties to focus
squarely on resolving the antitrust challenge, the parties will