DOJ Again Balks At Proposed $19.9 Mln Severance For AMR's Horton

[Purveyor]

Aug 2 (Reuters) - The U.S. Department of Justice is taking its third shot at nixing a proposed $19.9 million severance package for American Airlines Chief Executive Tom Horton, who will step down after American's bankrupt parent, AMR Corp , merges with US Airways.

In court papers filed on Friday in U.S. Bankruptcy Court in Manhattan, the U.S. Trustee Program, Justice's bankruptcy watchdog, said the severance package and other components of the plan violate bankruptcy laws.

AMR has filed a bankruptcy exit plan founded on its proposed merger with smaller carrier US Airways. While the plan has garnered support from most of AMR's creditors, it must still earn approval from the airline's bankruptcy judge, Sean Lane.

A handful of creditors, including bondholders and airport operators, have objected to the plan. Lane is expected to hear all objections and consider approval of the plan at a hearing on Aug. 15.

Tracy Hope Davis, the U.S. Trustee for the New York region, said Horton's parting gift defies bankruptcy laws that bar severance payments greater than 10 times the mean severance given to employees, and that are not part of a program applicable to all workers.

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http://www.reuters.com/article/2013/08/02/amr-bankruptcy-idUSL1N0G31XL20130802

[indepat]

1. Surely that $19.9 million severance package is not more than ten times greater than

the mean severance given employees. No sir. Surely not!