AMR Corp. has an extra month to file its restructuring plan with the Bankruptcy Court, the judge ruled on Thursday.
At a hearing in White Plains, N.Y., U.S. Bankruptcy Judge Sean Lane granted AMR's request to extend the deadline for its exclusive filing period to Jan. 28. The extension was supported by the unsecured creditors committee and prevents competing restructuring plans from being considered by the court.The parent company of American Airlines was also sued by a noteholder trustee that says the Fort Worth-based carrier is required to make a payment owed to investors under the airline's plan to borrow $1.5 billion and repay debt.U.S. Bancorp, the trustee for $174.2 million of notes due in 2016, wants the court to order that American is required to pay a "make-whole" amount under the refinancing plan, according to documents filed in bankruptcy court. AMR said in October that it's seeking court permission to borrow $1.5 billion backed by aircraft and redeem existing debt to take advantage of lower interest rates.Lane heard arguments on Thursday from lawyers for the airline and U.S. Bancorp about the financing request. He said he will rule "as quickly as possible."Make-whole provisions, under which investors receive a premium if the securities are redeemed early, are included in credit agreements to create a disincentive for borrowers to call bonds before their scheduled maturity.American, which filed for bankruptcy last November, also won approval for a settlement that restructures financing agreements for regional aircraft.Marathon was seeking a court-ordered investigation into a deal in which American assumed $2.26 billion of debt that American Eagle owed in exchange for regional jets that were transferred to American.Separately, AMR said its passenger traffic dropped 3.7 percent in October as the company cut flights across its network. Capacity declined 3.4 percent and its load factor decreased 0.3 percentage points to 82.3 percent for the month. Most of the flight cuts came in its domestic network where capacity was down 5 percent and traffic dropped 6 percent compared to last October.The Fort Worth-based parent company of American Airlines and American Eagle said unit revenues increased 0.4 percent for the month.Staff writer Andrea Ahles contributed to this report, which includes material from Bloomberg News.
