#Breaking Bankruptcy Judge Sean Lane approves merger between American Airlines and US Airways but rejects CEO’s $20M severance.@nbcdfw
— ScottGordonNBC5 (@ScottGordonNBC5) March 27, 2013
Judge says approving severance would “muddy the water” and “add multiple layers of additional review” makes for confusion.
— ScottGordonNBC5 (@ScottGordonNBC5) March 27, 2013
Judge: “That’s my ruling. I’ll provide a written explanation with more details as soon as possible.”
— ScottGordonNBC5 (@ScottGordonNBC5) March 27, 2013
From Gordon’s piece:
Lane said he supported the merger in general but suggested the bonus plan for Horton, who has agreed to step down within a year of the completed merger, and other top employees, violates bankruptcy law and instead should be part of the airline’s reorganization plan to be submitted later.
“I’m not trying to pile onto Mr. Horton, but it’s an intellectual issue,” Lane said. “If I pass it now, the argument is it’s a done deal.”
Lane didn’t object to the actual severance payment but agreed with the trustee that the timing of it seemed to violate prohibitions in the bankruptcy law.
“I am bound by the way Congress drafted the statute,” Lane said, adding that he was worried about setting a bad precedent that lawyers in future cases will try to capitalize upon. “There are many, many smart lawyers out there,” Lane added. “It’s not hard to imagine.”
