AMR and unsecured creditors committee oppose appointment of examiner

By Caroline Salls

Pittsburgh, Nov. 2 - AMR Corp. and its official committee of unsecured creditors objected to Marathon Asset Management, LP's motion for appointment of an examiner to investigate intercompany transactions that occurred in the months before AMR's bankruptcy filing, according to Thursday filings with the U.S. Bankruptcy Court for the Southern District of New York.

AMR called the examiner motion "an obvious litigation tactic by Marathon" to delay consideration of an aircraft-related settlement motion, as well as to "exert some perceived leverage over the debtors."

"Marathon has filed the examiner motion filled with baseless allegations and conjecture about purported intercompany waivers, which are not proposed by the [settlement] motion, in an attempt to delay the debtors' restructuring efforts and the approval of a very favorable settlement for the benefit of all economic stakeholders," AMR said in its objection.

The company said it does not believe that there are legally sustainable fraudulent transfer causes of action in connection with a pre-bankruptcy transaction cited by Marathon.

AMR said the negligible possibility that a cause of action could be successfully asserted by any of the debtors is not worth endangering the substantial benefits of the restructuring transactions.

The company said these benefits include roughly $670 million in reduced debt obligations, the avoidance of significant claims litigation, flexibility to address changed business circumstances in the future and certainty in the AMR debtors' business strategy.

Committee objection

In its objection, the committee said it has spent substantial time over the past year analyzing and assessing the debtors' actions and decisions related to their fleet strategy and is well suited to conduct its own investigation.

The creditor group said the examiner motion "adduces no evidence to support the appointment of an examiner at this time, particularly in light of the fact that the committee has already commenced such an investigation."

As part of its review of the debtors' motion to approve the restructuring of more than $1 billion in debt obligations concerning 216 regional aircraft, the committee said it has conducted a preliminary investigation into the pre-bankruptcy transactions in question.

In addition, the committee said it has suggested changes to the proposed form of order approving the settlement motion that would preserve the rights of parties in interest to challenge the location of general unsecured non-priority pre-bankruptcy claims.

A hearing is scheduled for Nov. 8.

AMR Corp., the Fort Worth-based parent of American Airlines, filed for bankruptcy on Nov. 29, 2011. Its Chapter 11 case number is 11-15463.

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