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The severance payment violates bankruptcy laws, the U.S. Trustee’s office, a part of the Justice Department that monitors bankruptcy proceedings, said in a court filing today in New York.
American parent AMR Corp. has sought court approval of the severance under its plan to exit bankruptcy court protection by merging with US Airways. U.S. Bankruptcy Judge Sean Lane in Manhattan denied approval of the severance when he approved the merger agreement in March.
Sean Collins, a spokesman for Fort Worth, Texas-based AMR, didn’t immediately respond to an e-mail seeking comment about the objection.
The case is in re AMR Corp., 11-15463, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
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