US bankruptcy judge Sean Lane has approved American Airlines' bankruptcy plan—mostly:
Judge Sean Lane approved the plan at a hearing in U.S. Bankruptcy Court in New York, but denied a clause that would pay Tom Horton, AMR's outgoing chief executive, $19.9 million in severance.
But on Thursday, after nearly two weeks of consideration, Lane concluded his job was to determine whether the plan meets standards of feasibility under bankruptcy law, independent of the lawsuit.
"The question is whether it will succeed once consummated, not whether it will be consummated," Lane said. "Here, there can be no dispute that the plan is feasible, if allowed to proceed."
For AMR, the focus now shifts to resolving the Justice Department's lawsuit, filed on August 13. The department argues the merger will create too much consolidation and hurt consumers.
While Lane's ruling gives his blessing to AMR's restructuring efforts, any divestitures or other material changes to the plan that result from settlement talks with the Justice Department would have to go back to him for approval.
Sorry, Tom. You crashed your airline; you don't get your $20 million. And while I can't speak for all the employees of American Airlines, I'll bet money that they're all glad of this result, and ready to see the back of you.