American Airlines and US Airways have had their pending merger approved by a U.S. bankruptcy judge, but a nearly $20 million dollar solid gold parachute for American’s CEO Tom Horton was put on the back burner.
U.S. Bankruptcy Judge Sean Lane greenlighted the much-publicized AA/US Airways merger on March 27 and has also approved American’s request for more time to file its reorganization plan; American’s parent company AMR Corp. has until May 29 to file this plan.
Lane’s deferment of judgment on Horton’s glittering retirement package ($19.9 million in cash and stocks and first-class seat vouchers for life on the merged airline for Horton and his wife) shifts the hot button issue to American’s reorganization plan. Judge Lane told the press the reason for the deferment was not the amount but rather prohibitions in U.S. bankruptcy court. Lane said he would make a written decision at a later date. Industry analysts expect Horton’s package to be approved.
The merger itself will still need approval from U.S. regulators and from US Airways shareholders.
Both carriers have said they expect the merger to be completed by September.