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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.

American Airlines parent AMR Corp. said that, based on a preliminary count, a sufficient number of creditors approved the company’s reorganization plan, which essentially would take the company out of bankruptcy protection in a merger with US Airways Group Inc., the Wall Street Journal reported today. Creditor voting on the plan concluded on Monday, and Tuesday was the deadline for objections to be filed in bankruptcy court. Bankruptcy Judge Sean Lane has scheduled a confirmation hearing on the reorganization plan on Aug. 15, one of the final steps needed for AMR to step out of court protection and close the stock-swap merger.

American Airlines parent AMR Corp. and US Airways Group Inc. are beginning a series of important meetings with U.S. antitrust regulators, dubbed “the end game” that could shape the details of the world’s largest airline merger, the Wall Street Journal reported today. U.S. Department of Justice staffers who have been reviewing the planned merger for nearly six months will use the meetings with the carriers and their lawyers to go over the government’s questions and concerns, possibly raising the prospect of concessions to win its backing. The U.S. meetings come as American and US Airways offered to divest a pair of daily slots at London’s Heathrow Airport in order to win European Union backing for their planned merger. The two airlines, which announced their merger plan in mid-February, have said that they expect the deal to win antitrust approvals and hope to close the transaction in the third quarter. The deal, which provides AMR a route out of bankruptcy-court protection, currently is being voted on by AMR’s creditors and is slated for a possible confirmation hearing in bankruptcy court on Aug. 15.

Retirees say they fear a recent proposal from AMR Corp. may let the parent of American Airlines shed nearly $1.37 billion in retiree claims that the bankruptcy court has yet to evaluate, Dow Jones Daily Bankruptcy Review reported today. The retirees are taking aim at a proposal by AMR to set aside $331 million to cover certain claims that are determined eligible for payment after checks have already started going out to other creditors.

Tom Horton, CEO of American Airlines parent AMR Corp., said yesterday that the airline is nearing the end of its bankruptcy restructuring and is benefiting from cost savings and getting a boost to revenue from its fleet and product upgrades and international expansion, the Wall Street Journal reported yesterday. After AMR posted its first second-quarter profit since 2007, Horton said that further cost savings and revenue improvements will kick in over the coming months based on expected labor productivity gains, new vendor and supplier contracts and the introduction of larger regional jets. So far, the company has extracted about 80 percent of the cost savings it expected to capture in bankruptcy, where it landed in late 2011, Horton said. Read more.

U.S. District Judge Alvin K. Hellerstein ruled yesterday that real estate developer Larry Silverstein can’t seek $3.5 billion from airlines whose planes were hijacked by terrorists and flown into the World Trade Center’s twin towers on Sept. 11, 2001, Reuters reported yesterday. Silverstein, who leased the skyscrapers about two months before they were destroyed, already collected $4.1 billion from insurers and can’t collect twice under New York law, Judge Hellerstein ruled. “If this case were to go forward, the WTC companies would not be able to recover anything against the airlines,” said Hellerstein. The judge rejected any suggestion that Silverstein had sought a windfall, saying that he was among the “heroes” who sought to “create beauty out of the destruction.” Silverstein’s World Trade Center Properties LLC in 2008 sued United Continental Holdings Inc., American Airlines and its parent AMR Corp., claiming their negligence led to the destruction of the towers.

European competition regulators have pushed back a final decision on the proposed merger of American Airlines parent AMR Corp. and US Airways Group Inc. until next month after the carriers offered concessions to gain approval for the deal, the Wall Street Journal reported today. The proposed remedies weren't disclosed and the European Commission isn't viewed by analysts as a significant roadblock for the deal, which would create the world's largest airline. Meanwhile, in the U.S. the carriers have steered clear of discussing possible concessions as the transaction is reviewed by the Justice Department. The European Commission cleared without conditions the last two big U.S. airline mergers—those creating United Continental Holdings Inc. and an enlarged Delta Air Lines Inc. It has continued to probe the competitive impact of the three big marketing alliances that dominate trans-Atlantic travel, requiring some member carriers to give up takeoff and landing slots at congested airports.

A federal judge is days away from deciding if New York developer Larry Silverstein can recover as much as $3.5 billion from airlines for damages to the World Trade Center on Sept. 11, 2001, on top of more than $4 billion he has received from insurers, Reuters reported yesterday. U.S. District Judge Alvin Hellerstein started a three-day trial yesterday in which he will decide how much of the insurance payments should offset the damages Silverstein is seeking from the airlines. These include United Airlines, now United Continental Holdings Inc., American Airlines and American's parent, AMR Corp. Roger Podesta, a lawyer for the airlines, argued that Silverstein's insurers have already paid him for the same losses he is seeking from the airlines. The insurance payments and the claims against the airlines are "for the same category of loss," Podesta said in opening arguments. Should Judge Hellerstein decide the claims do not correspond with each other, Silverstein would then have to prove liability in a separate trial.

US Airways Group Inc. shareholders approved the carrier's plan to merge with AMR Corp.'s American Airlines, clearing another hurdle in the deal that would create the world's largest carrier, Reuters reported on Friday. Of nearly 132.8 million shares voted, 132.3 million were in favor of the merger, the company announced on Friday after its annual meeting in New York. US Airways said 257,757 shares were cast against the merger, and 256,523 abstained. The $11 billion merger deal was announced in February and the companies expect to complete it by the end of September. The new American Airlines will be based in Dallas-Fort Worth. The merger must still be approved by antitrust regulators. The U.S. Justice Department, along with attorneys general from 19 states, is considering whether the merger would harm competition. Some states involved in the probe worry that they could lose an airline hub because of the transaction. Others are concerned about potential curbs to service in smaller cities.

Lawmakers recently introduced legislation that would allow American Airlines pilots, flight attendants and other union workers to defer taxes on the equity they’ll receive at the conclusion of the airline’s chapter 11 restructuring, the Wall Street Journal reported today. Rep. Michael G. Grimm (R-N.Y.) is sponsoring the bipartisan bill, H.R. 2591, that would push out existing deadlines under federal aviation law to ensure that the union workers can take advantage of the tax deferral that has helped other airline employees in prior bankruptcy cases. American Airlines parent AMR Corp. wants to exit chapter 11 protection through a merger with US Airways Group Inc. AMR is proposing to give its labor unions, unsecured creditors and current shareholders 72 percent of the new common stock in the merged airline, which would keep the American name. The payment plan remains subject to bankruptcy-court approval, while the merger is now under antitrust review.