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American Airlines confirmation order filed, but exit on hold pending DOJ case resolution

 U.S. Bankruptcy Judge Sean Lane published his order confirming American Airlines’ reorganization plan Monday night, nearly six weeks after reading his confirmation opinion from the bench during a hearing in Manhattan.

The order does not weigh in on the pending antitrust suit currently blocking AMR Corp.’s proposed $11 billion merger with US Airways, but specifies that AMR must submit to the bankruptcy court the resolution of that case before the company may officially exit Chapter 11. U.S. District Court Judge Colleen Kollar-Kotelly is scheduled to hold a Nov. 25 hearing in Washington, D.C., to consider the Department of Justice suit seeking to block the merger as anticompetitive.

The merger itself is the centerpiece of AMR’s plan. If the DOJ successfully blocks the merger, AMR will return to bankruptcy court and must seek confirmation of an alternative plan that would reorganize AMR as a standalone company. If AMR and US Airways reach a settlement with the DOJ, AMR must file a motion with the bankruptcy court seeking approval of the deal, according to Lane’s order.

Judge Lane granted bankruptcy court approval of the merger this March, calling it a “truly tremendous result.” AMR’s creditors voted overwhelmingly in favor of the plan. Of the eight creditor classes entitled to vote, at least 88% of the ballots received, representing more than 97% of the claims value voting in each class, were in favor. More than 99% of the shares tabulated for the class of stockholders voted to accept the plan.

Until the DOJ filed its suit, AMR expected to close its merger with US Airways and simultaneously emerge from Chapter 11 in the third quarter. – John Bringardner