AMR needs of stand-alone bankruptcy plan: Advisor

By Nick Brown

NEW YORK | Wednesday, April 25, 2012 4: 35 pm EDT

NEW YORK (Reuters) - a financial advisor for the bankrupt is parent of American Airlines said Wednesday that the company must form a standalone plan, restructuring, even if it may eventually consider a merger with another airline.

Rothschild Inc. Management Director David Resnick made the statement after having been pressed by AMR unions recognize the expected value of their proposal the week last merge AMR Corp (AAMRQ.)(PK) and US Airways (LCC.)(N).

Testify at a hearing of the Court on the fate of the contracts of employment of AMR, Resnick conceded that AMR has a fiduciary duty to the creditors to consider all options to maximize recoveries. But the company must also make a stand-alone plan restructuring, he said.

"In my view, it is illogical to put all your eggs in the same basket, to pursue an alternative without looking at a range of options," Resnick said in testimony in bankruptcy court to the United States in Manhattan.

"The base case to compare alternatives is a self-contained regime." Then, from there, you can compare other options. »

US Airways President Scott Kirby said on a conference call Wednesday that the merger with AMR could create "dramatically" value. Unions of AMR, said last week, said that such a merger could save thousands of jobs.

AMR declared bankruptcy in November as he was struggling with high labour costs. He said it needs savings of $ 1.25 billion a year from its workforce, including 990 million of its unions.

Resnick testified that the cuts are necessary to ensure access to capital AMR markets and obtain high credit ratings that are necessary to finance a broad business plan which implies to develop its fleet of aircraft and with a focus on international markets.

The alternative of a merger has been avant-centre since last week, when three primary unions of society, representing the pilots, attendants and flight ground workers, said that have an agreement with US Airways that could save more than 6 000 jobs.

AMR CEO Tom Horton told employees in a letter Monday that the agreement would not be remove AMR seeking a restructuring of autonomous.

THE FATE OF CONTRACTS OF EMPLOYMENT

Testimony of Resnick is the third day of a hearing in course application for AMR to abandon its collective bargaining agreements and to impose unilateral working conditions.

AMR made the request after reaching a crossroads in the negotiations with the unions, who said the concessions required of them are unfair.

The unilateral terms would apply as the parties attempt to cross the dam and the hash of an agreement.

So his request granted by the judge Sean Lane, AMR must prove not only that unions have unreasonably prevented prior negotiation efforts, but that he has explored alternatives to avoid the drastic measure. This last point has become a central theme, with union attorneys grilling witnesses more AMR if sufficiently considered the alternative of a merger.

A lawyer for union also AMR Resnick feet Wednesday fire edge the if it believes that the proposed reductions of labour are the "absolute minimum" necessary for AMR survive.

Resnick upset in reply, saying that the figure represents the minimum necessary for AMR be viable, not simply survive. Pressed, he admitted that he had not been deprived of any version of the plan that cuts less work.

LONG WAY TO GO

Already four witnesses, including the restructuring of AMR head, Bev Goulet, testified. The hearing expected to last through Friday.

Judge Lane does not make a decision immediately. When the hearing ends, the company and its unions will have two weeks to try to negotiate consensual contracts. The Transport Workers Union, which represents 26 000 field workers to AMR, plans to send the plan of activities to its members for a vote, sources told Reuters.

If the window 2 weeks expire without new cases, trade unions in May will have the opportunity to present their case before the Court. Lane j. would then make a decision in June.

The sides must finally attempt to reach consensual agreements. If granted, the unilateral conditions would be imposed in the meantime.

The case is in re AMR Corp. et al., U.S. Bankruptcy Court, Southern District of New York, no. 11-15463.

(Reported by Nick Brown;) (Editing by Richard Chang)