This morning the bankruptcy court approved four motions filed by American Airlines to assume, as modified, four prepetition aircraft purchase agreements with Airbus, Boeing, GE and Rolls Royce. These agreements, as modified, include agreements to fix the amount of claims to be allowed in favor of the four aircraft vendors as well as releases in favor vendors. Counsel for Creditors Committee represented to the court that the Committee supports each motion. On a related motion, the court also approved placing the aircraft purchase agreements under seal due to the extremely confidential nature of the agreements.In addition, the court approved motions to allow American to enter into an agreement with the Port Authority of New York and New Jersey which provides for the assumption of certain gates at Newark Airport and the rejection of others that it no longer needs. On a related matter, the court approved American’s agreement to reject sublease agreements with United Airlines and Porter Airlines and to enter into a sublease agreement with Virgin Air.The court also approved the Creditor’s Committee’s application to pay certain fees and expenses of members of the official committee of unsecured creditors and the final fee application of Boston Consulting Group (“BCG”) in the amount of $11.7 million. BCG was retained by American to provide consulting services with respect to the restructuring and reduction of wages and benefits for the company’s non-union employees.
Finally, the court approved two motions to extend the deadline to assume or reject two leases of non-residential real property to April 3, 2013.
Orders reflecting the court’s rulings should be entered later today or tomorrow.
The court will hold a hearing later today at 2:00 p.m. (ET) in connection with American’s motion for summary judgment seeking an order determining that American can unilaterally modify retiree benefits for current and future retirees. A report with respect to the outcome of that motion will be provided at the conclusion of that hearing.
Lowenstein Sandler LLP
Sharon Levine, Esq.
Paul Kizel, Esq.