U.S. Airways' merger with American Airlines moves closer to completion

June 04, 2013

A U.S. Bankruptcy Judge has cleared the way for American Airlines’ creditors to vote on a merger with Tempe-based U.S. Airways.

Judge Sean Lane has approved American Airlines’ parent AMR Corporation’s description of its restructuring plan, including the merger with U.S. Airways that would create the world’s biggest airline. If creditors approve the plan, the company will return to court to seek final approval from Lane this summer.

AMR filed for bankruptcy protection in November of 2011. In February of this year, the two airlines announced plans to merge.

Meanwhile, Judge Lane delayed ruling on a $19.9 million severance package for AMR CEO Tom Horton. The U.S. Trustee’s Office, part of the Justice Department, is arguing the size of Horton’s payout violated a 2005 law designed to limit compensation bankrupt companies can give to insiders.

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