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A judge is allowing AMR, the parent company of American Airlines, to stay in bankruptcy status until December 28, 2012 instead of September 2012 as originally planned. A Thomson Reuters article published July 19, 2012 explains why AMR needs extra months to restructure.
A major trigger for filing for bankruptcy was AMR’s high labor costs. AMR originally wanted to increase salaries while it restructuring and cutting costs. The airline filed for Chapter 11 bankruptcy, which was designed to protect businesses from creditors for a time.
News articles have speculated that AMR might be considering merging with US Airways Group. US Airways is not only a rival airline, but also an AMR creditor. The AMR and US Airways CEOs met on July 17 heightening speculation of a merger. It seems, though, that no official decision was made at the meeting.
Consumers in debt have rights in addition to corporations. If you are in debt or are considering bankruptcy, you should meet with an attorney. Jayson Lutzky has over 29 years of experience practicing law and offers free initial consultations. To set up a consultation, call his office at (800) 660-5299 or visit www.BankruptcyNYC.com.