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Tuesday, January 8, 2013

AMR Sees ‘Reasonable Possibility of Shareholder Value'

Per www.bloomberg.com:



Jan. 8 (Bloomberg) -- AMR Corp., the bankrupt parent of American Airlines, says its value has “significantly appreciated” and there may be a recovery for shareholders, who generally receive nothing in bankruptcy cases.

AMR, which is considering a merger with US Airways Group Inc. (LCC), notified the Office of the U.S. Trustee of the development in a Jan. 3 letter filed today with the Securities and Exchange Commission.

  AMR Sees ‘Reasonable Possibility’ of Value for Shareholders
AMR Corp., which is considering a merger with US Airways Group Inc., notified the Office of the U.S. Trustee of the development in a Jan. 3 letter filed today with the Securities and Exchange Commission. 

“Depending upon the ultimate strategic alternative adopted and pursued, there exists a reasonable possibility that there may be value for AMR equity holders,” AMR attorney Harvey Miller wrote to the office, which monitors bankruptcy proceedings.

US Airways has been pursuing a merger with Fort Worth, Texas-based AMR, which filed for bankruptcy in November 2011. AMR has a board meeting scheduled for tomorrow at which it had hoped to be ready to decide whether to go ahead with a tie-up, people familiar with the matter said in December.

Bruce Hicks, an American spokesman, declined to comment on the specifics of the meeting, beyond citing Chief Executive Officer Tom Horton’s comment in a Jan. 3 message to employees that “we expect to bring this to a conclusion within a matter of weeks.”

A combination of American, the third-largest U.S. carrier, and No. 5 US Airways, based in Tempe, Arizona, would create the world’s largest airline.

AMR Debt

Merger optimism has fueled a rally in AMR debt. The $460 million of 6.25 percent convertible notes due in October 2014 traded at 92.625 cents on the dollar, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. That’s a fivefold surge from the 17.75 cents after AMR’s bankruptcy filing on Nov. 29, 2011.

AMR’s shares rose 1.5 percent to 90 cents in over-the- counter trading. They closed at $1.62 the day before the company sought court protection.

Miller, of law firm Weil, Gotshal & Manges LLP, wrote in the letter that AMR previously opposed the formation of an equity committee in the bankruptcy case to represent shareholders because “there did not appear to be a substantial likelihood” that they would receive “any meaningful distribution.”
Miller didn’t immediately respond to an e-mail or phone message seeking comment on the letter after normal business hours.

“Since January of 2012, the debtors have made remarkable progress in stabilizing their businesses and improving their prospects,” he wrote.

The case is in re AMR Corp., 11-15463, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

To contact the reporter on this story: David McLaughlin in New York at dmclaughlin9@bloomberg.net.

To contact the editor responsible for this story: John Pickering at jpickering@bloomberg.net.

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