AMERICAN AIRLINES: Proposes Settlement With U.S. Bank

May 9, 2013
American Airlines Inc. asked the U.S. Bankruptcy Court in Manhattan to approve a settlement agreement with U.S. Bank National Association. American Airlines entered into the settlement agreement in connection with a pre-bankruptcy deal it signed with the bank and Wilmington Trust Co. to lease an aircraft, which bears FAA registration number N643AA. Under the deal, U.S. Bank can assert a general unsecured non-priority claim against American Airlines for any breach, termination, rejection or modification of the lease.

American Airlines Inc. asked the U.S. Bankruptcy Court in Manhattan to approve a settlement agreement with U.S. Bank National Association.   American Airlines entered into the settlement agreement in connection with a pre-bankruptcy deal it signed with the bank and Wilmington Trust Co. to lease an aircraft, which bears FAA registration number N643AA.  Under the deal, U.S. Bank can assert a general unsecured non-priority claim against American Airlines for any breach, termination, rejection or modification of the lease.  The allowed claim won't be subject to any objection, counterclaim, right of setoff or recoupment.   The settlement agreement is not publicly available as it contains "sensitive commercial information," according to AMR lawyer, Jasmine Ball, Esq., at Debevoise & Plimpton LLP, in New York.   A court hearing to consider approval of the agreement is scheduled for April 3.                         About American Airlines   AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements.  AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors.   Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors.  Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel.  Rothschild Inc., is the financial advisor.   Garden City Group Inc. is the claims and notice agent.   Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings.  Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor.   AMR and US Airways Group, Inc., on Feb. 14, 2013 announced a definitive merger agreement under which the companies will combine to create a premier global carrier, which will have an implied combined equity value of approximately $11 billion.  The deal is subject to clearance by U.S. and foreign regulators and by the bankruptcy judge overseeing AMR's bankruptcy case.   Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS.  The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000).

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