Justice Department Challenge Throws Up Roadblock To The Merger

The lawsuit filed by the U.S. Department of Justice (DOJ) and several Attorneys General around the country has caused a bankruptcy court judge to delay his ruling on the planned merger between US Airways and American Airlines.

Judge Sean Lane said Thursday he has "lingering doubts" about the merger in light of the suit despite arguments from lawyers for both airlines that the suit should not stop him from approving the plan, according to a report from the Charlotte Observer.

The suit means that the planned September date for the completion of the merger is in serious jeopardy. While the merger would make one fewer major airline, the companies said that the marriage would increase competition with industry giants United and Delta.

The ruling also delays final approval of a $20 million severance package for AMR CEO Tom Horton.

Officials from both airlines have said they will fight the DOJ lawsuit, but if the government prevails, AMR will have to go back to a plan that leaves it as a stand-alone airline, a process that will significantly extend the company's timeline for emerging from bankruptcy.

FMI: http://newamericanarriving.com/