AMR trustee objects to payment of $20 million to CEO as part of plan

By Lisa Kerner

Charlotte, N.C., Aug. 2 - U.S. trustee for region 2 Tracy Hope Davis objected to confirmation of the second amended joint Chapter 11 plan of AMR Corp. and its affiliated debtors dated June 5, according to documents filed Friday with the U.S. Bankruptcy Court for the Southern District of New York.

Specifically, Davis objected to approval of a $20 million severance payment to AMR chief executive officer Thomas Horton, the payment of which is prohibited under a specific statutory provision of the Bankruptcy Code, the filing said.

A hearing is scheduled for Aug. 15.

Horton's $19.88 million severance package would have been paid 50% in cash and 50% in common stock of the merged company.

As previously reported in April, a federal judge denied approval of the severance payment as part of a written decision approving a merger agreement between American Airlines and US Airways Group, Inc.

Horton will act as chairman of the combined airline's board of directors through its first annual meeting of shareholders and will also act as the combined airline's representative to the oneworld Alliance and the International Air Transport Association.

US Airways chairman and CEO Doug Parker will serve as CEO and a member of the board of directors. He will assume the additional position of chairman of the board following the conclusion of Horton's service.

AMR Corp., the Fort Worth, Texas-based parent of American Airlines, filed for bankruptcy on Nov. 29, 2011. Its Chapter 11 case number is 11-15463.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.