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, Reuters reported on Friday. In court papers filed on Friday, the U.S. Trustee Program said that 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. A handful of creditors, including bondholders and airport operators, have objected to the plan. Bankruptcy Judge Sean Lane is expected to hear all objections and consider approval of the plan at a hearing on Aug. 15.
