AMR Corp. could face months of new restructuring talks, with shareholders likely to suffer the biggest blow, if its merger with US Airways Group is successfully blocked by the U.S. government, Reuters reported yesterday. The Justice Department on Tuesday sued to stop American Airlines' parent from combining with US Airways, saying the proposed tie-up would reduce competition and hurt consumers by leading to higher airfares and fees. The two airlines vowed to defend the $11 billion deal in court. If the government succeeds, it would send AMR, which has been in bankruptcy since 2011, back to the drawing board to figure out how to pay back creditors, fund a restructuring and improve its business model. Some of AMR's financial issues were resolved before the merger was announced in February. Most notably, the company had reached money-saving labor deals with the unions after months of bitter talks, and the agreements are not contingent on the merger.
