AMR Wins Right To Hire Bankruptcy Advisers
FORT WORTH (AP) - American Airlines says a federal judge approved its hiring of legal, business and financial advisers to help steer the company through reorganization under bankruptcy protection.
Sean Collins, a spokesman for Fort Worth, Texas-based American parent AMR Corp., said Wednesday that U.S. Bankruptcy Court Judge Sean Lane issued the ruling in New York.
The airline's unions and a representative of the federal government had questioned the need to hire the advisers.
Separately, AMR told the court that it lost $234 million in January. Excluding restructuring expenses, the loss would have been $64 million. The company didn't provide comparison figures from January 2011.
American, AMR and American Eagle asked the court for permission to hire bankers Rothschild Inc. -- which could get a $15 million bonus at the end of the case -- bankruptcy attorneys from Weil Gotshal & Manges LLP, Boston Consulting Group and Bain & Co.
AMR is trying to cut $2 billion in annual spending, including $1.25 billion per year in labor costs, as part of a bankruptcy turnaround plan. To carry out much of its plan, American would need union approval or permission from the bankruptcy judge to throw out existing labor contracts.
On Tuesday, the union for American's pilots sued the company in an effort to block American's plan to outsource more flying to regional carriers.
(© Copyright 2012 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)
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