You choose, we deliver
If you are interested in this story, you might be interested in others from The Journal Gazette. Go to www.journalgazette.net/newsletter and pick the subjects you care most about. We'll deliver your customized daily news report at 3 a.m. Fort Wayne time, right to your email.

Business

  • Boeing to give California workers $47 million in back pay
    PALMDALE, Calif. — Boeing Co. will pay $47 million to hundreds of current and former Southern California employees who are owed back pay and benefits, a union announced Friday.
  • Startup funds soar to highest since 2001
    Funding for U.S. startup companies soared 57 percent in the first quarter to a level not seen since 2001, as venture capitalists piled more money into a growing number of deals, according to a report published Friday.
  • China trade group steps in
    Chinese police hauled away dozens of workers Friday to break up a march on a factory complex targeted by tens of thousands of laborers striking against the world’s largest maker of athletic shoes, while a government trade union said it would mediate
Advertisement

American-US Airways deal clears judge

– American Airlines won bankruptcy court approval Wednesday to combine with US Airways and form the world’s biggest airline.

“The merger is an excellent result. I don’t think anybody disputes that,” Judge Sean H. Lane said before issuing his decision.

The combined airline will have 6,700 daily flights and annual revenue of roughly $40 billion. The new American Airlines will fly slightly more passengers than United, the current No. 1. It will be run by Doug Parker, the CEO of US Airways Group Inc., who began pursuing a merger shortly after American filed for bankruptcy protection in November 2011.

Lane declined, however, to approve a proposed $20 million severance package for outgoing American CEO Tom Horton. The U.S. trustee had objected to the package and, while he didn’t question the amount, Lane agreed that the timing of it seemed to violate prohibitions in the bankruptcy law.

“Approving it today is just not appropriate,” Lane said.

The judge plans to issue a written decision at a later date detailing his reasoning.

Horton has spent nearly his entire career at American, becoming CEO when the company filed for bankruptcy. Horton will cede the CEO position to Parker when the deal closes, and has agreed to leave the company’s board within a year of the closing date.

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.

Separately, Lane approved a motion to extend American’s exclusive period for filing a reorganization plan until May 29, the last such extension allowed under law.

The merger also needs approval from Department of Justice antitrust regulators and US Airways shareholders. It is expected to close by the fall.

Advertisement