Creditors Hold As Much As $2 Billion In Debt For The Airline

A group of bondholders carrying some $2 billion in debt for American Airlines and AMR Corp. is getting involved in the decision about the airline's potential for a merger with US Airways group.

The bondholders have signed non-disclosure agreements with the airline so that they can examine relevant documents and be included in discussions about whether the airline should merge with the Arizona-based airline, or emerge from bankruptcy as a stand-alone carrier.

The bondholders were given standing in the proceedings because the amount they have invested in American makes them an important subset of a group that also includes unions and suppliers. The Wall Street Journal reports that the size of their holdings could give them the clout to block any path out of bankruptcy with which they disagree.

Bringing the bondholders into the mix could be a signal that the company is set to emerge from bankruptcy fairly soon, though no date has been mentioned. US Airways has made no secret of its desire to merge with American, which would create the country's largest airline in terms of traffic. United Continental Holdings currently holds that distinction.

Earlier this month, AMR CEO Tom Horton said in a memo that a decision could come "in a matter of weeks."

The bondholders reportedly have not said if they think Horton should keep his job either in a stand-alone or merged airline, sources close to the negotiations told the paper.

Meanwhile, the Dallas Business Journal reports that Wednesday, investors were buying shares of AMR Corp after a lawyer familiar with the case said the shares could have value after the bankruptcy is resolved. That sent the price up 39 cents to $1.20.

FMI: http://www.amrcaseinfo.com/