Judge approves American/US Airways merger
Mar 27, 2013, 4:14 pm
#1
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Mar 27, 2013, 4:28 pm
#2
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The proposed severance package includes $19.9 million in cash and stock as well as a lifetime of free first-class tickets on American for Horton and his wife.
Mar 27, 2013, 4:34 pm
#3
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That's exactly what I said too. That's more like an adamantium (yes I'm a nerd) parachute.
Another point is that the reorganization period extension was approved. I'm glad these extensions are limited -- by law, but they are taking the time to get as much right as they can. Hopefully.
Another point is that the reorganization period extension was approved. I'm glad these extensions are limited -- by law, but they are taking the time to get as much right as they can. Hopefully.
Mar 27, 2013, 4:44 pm
#4
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HOWEVER, that severance package was not approved by the judge. The reasoning is that this merger is occurring during bankruptcy and not after exiting. It is not appropriate at this time. Doesn't mean it won't be approved later, but right now it's an 'eh, no' for Horton. Makes you think about why he was so adamant to wait on a merger until AA was out of BK...hmmmmmm
Mar 27, 2013, 4:59 pm
#5
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This ruling is far from closing the deal for the merger:
1. This approved of the merger comes from the federal bankruptcy judge (Sean Lane) which is not the same as DOJ approval which is required and will be determined by a (different) federal judge, probably in August.
2. By rejecting Horton's severance at this time, the conditions of the merger cannot be fulfilled. If later approval does not come the merger will need to be renegotiated.
1. This approved of the merger comes from the federal bankruptcy judge (Sean Lane) which is not the same as DOJ approval which is required and will be determined by a (different) federal judge, probably in August.
2. By rejecting Horton's severance at this time, the conditions of the merger cannot be fulfilled. If later approval does not come the merger will need to be renegotiated.
Mar 27, 2013, 5:02 pm
#6
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Interesting news. Thanks for posting.
Mar 27, 2013, 5:18 pm
#7
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Any more bad news? 
Mar 27, 2013, 5:41 pm
#8
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This ruling is far from closing the deal for the merger:
1. This approved of the merger comes from the federal bankruptcy judge (Sean Lane) which is not the same as DOJ approval which is required and will be determined by a (different) federal judge, probably in August.
2. By rejecting Horton's severance at this time, the conditions of the merger cannot be fulfilled. If later approval does not come the merger will need to be renegotiated.
1. This approved of the merger comes from the federal bankruptcy judge (Sean Lane) which is not the same as DOJ approval which is required and will be determined by a (different) federal judge, probably in August.
2. By rejecting Horton's severance at this time, the conditions of the merger cannot be fulfilled. If later approval does not come the merger will need to be renegotiated.
This was just a necessary interim step since AA is still in BK so he must rule on such things. I also dont expect Horton in the end will have much to worry about his severance package. The board of directors can always sign off on that after the exit and will not need any judge to approve it.
Mar 27, 2013, 6:55 pm
#9
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This is not the DOJ hurdle. I still think this merger, while good for US stockholders, is anti-competitive. We'll see what happens there.
Mar 27, 2013, 7:18 pm
#10
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The DOJ will not make any major waves about it. They would already be sending signals if there were. All things point to it will be a relatively easy approval. So folks not in favor will just have to get over it.
Mar 27, 2013, 7:25 pm
#11
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Agreed - there will likely be some minor contingencies (loss of some slots at DCA) to help appease consumer groups.
Mar 27, 2013, 7:29 pm
#12
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Indeed - Horton earned the $20kk by throwing himself under the bus, making the tough decisions to resolve labor issues, something NONE of his predecessors were willing to do.
Mar 27, 2013, 7:33 pm
#13
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Agreed it was long over due it had to be done in the end. That was foreseeable as far back as 05 but ultimately the board made the decision and Horton was the chosen guy to do it. Arpey was just not cut out to make the tough choices that had to be made. It dragged on far to long.
Mar 27, 2013, 7:35 pm
#14
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Sounds about right, probably some slots at DCA perhaps LHR from the EU is about all that will happen, but AA/US already know that and have accounted for it.
Mar 27, 2013, 9:01 pm
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I posted this on the ongoing main thread shortly after 4p ET when Bloomberg posted the story. Why did OP start another thread?