Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Creditors move to file amicus brief in DOJ’s challenge to American Airlines-US Airways merger, (Oct 28, 2013)

By Tobias J. Gillett, J.D., LL.M.

The unsecured creditors of American Airlines’ parent company, AMR Corporation, have asked the federal district court in Washington, D.C. for leave to file an amicus brief in the Department of Justice’s challenge to challenge to the proposed $11 billion merger between AMR and US Airways Group, Inc. (U.S. v. US airways Group, Inc., October 28, 2013, Kollar-Kotelly, C.).

In its motion, the Official Committee of Unsecured Creditors of AMR Corporation requests permission to file an amicus brief that would address “the appropriate analytical framework under Section 7 of the Clayton Act for evaluating mergers in the bankruptcy context as well as the relative merits of the merger in comparison to starting over in the bankruptcy process.” According to the motion, AMR and US Airways have consented to the filing of the brief, the plaintiff states have not objected to the filing, but the Department of Justice has objected.

The Official Committee “is a statutory fiduciary created by Congress to represent the stakeholders, including organized labor, that will own the majority interest of the airline that will exist following the proposed merger of AMR and US Airways.” The motion contends that the “unique perspective” of the Committee, obtained from overseeing AMR’s business reorganization, would assist the court in evaluating the merits of the case. The motion notes that the current plan of reorganization “is the only plan proposed to and voted on by creditors and stakeholders and confirmed by the United States Bankruptcy Court for the Southern District of New York” and argues that “an injunction here would return the AMR bankruptcy to square one with likely disruption and disarray among numerous, financially unaligned stakeholders.”

The case is Civil Action No. 1:13-cv-01236 (CKK).

Attorneys: Gregory B. Craig (Skadden, Arps, Slate, Meagher &Flom LLP) for Official Committee of Unsecured Creditors of AMR Corporation.

Companies: AMR Corp.; US Airways Group, Inc.

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