AMR, and its subsidiaries, including American Airlines and American Eagle, (the Debtors) filed for Chapter 11 restructuring on November 29, 2011. For basic information purposes only, listed below are some of the milestones that will occur as AMR and its subsidiaries move through the restructuring process. This description is not intended or offered as legal, professional or financial advice and is not a full and detailed outline of a restructuring process. You should direct any questions regarding your specific circumstances to your personal lawyer.
The Debtors file their Chapter 11 petitions and also secure permission from the court to continue to maintain certain processes and duties that are required in the ordinary course of conducting their business; e.g., continue paying employee wages and offering employee benefits, continue operating flights, etc.
Within the First Two Weeks
The Office of the U.S. Trustee (a governmental department tasked, in part, with overseeing the administration of a restructuring) selects the parties who will make up the Official Unsecured Creditors’ Committee (“UCC”) throughout the restructuring process.
The UCC represents all of the stakeholders who have an interest in the outcome of the Chapter 11 filing and will assist, throughout the restructuring process, with making decisions related to the restructuring.
Approximately 30-60 after the Filing
An initial creditors meeting is held between representatives of the Debtors and individuals and businesses that may have claims against the Debtors (the creditors).
Within the First Few Months of the November 29 Filing Date
The Debtors have the exclusive right to propose a plan of reorganization for the first 120 days after their Chapter 11 filing. That time may be extended up to a total of 18 months by the court. In large Chapter 11 cases, such as the Debtors’, courts generally grant extensions if, among other things, negotiations with the creditors are progressing. During this exclusive period, the Debtors develop a plan of reorganization through discussions among the Debtors, the creditors and other stakeholders.
Once the plan of reorganization is developed, it is filed with the court. The court will schedule a hearing to, among other things, approve the plan of reorganization and provide for the creditors and other proper parties to vote on the plan of reorganization. Parties entitled to vote then vote on the plan of reorganization. Following voting, if the court confirms the plan of reorganization, all claims will be satisfied as directed in the plan and the Debtors will emerge from Chapter 11 and operate their business as described in the plan of reorganization.
Other Events that Occur throughout the Restructuring Process
Monthly Omnibus Hearings
Throughout the restructuring process, the court will hold regular monthly hearings with the Debtors, the U.S. Trustee representative, the UCC representatives, and other interested parties to resolve disputes, make decisions and generally ensure that the restructuring process is proceeding in an orderly and effective manner.
Approximately 120 Days – Six Months Post-Filing
Potential creditors will receive notice of the procedures and deadline for filing a claim for any monies the potential creditors believe they are owed by the Debtors. This notice is called a Notice of Claims Bar Date.
Once the Notice of Claims Bar Date deadline has passed, the Debtors will work with the court to determine whether money is owed, and proceed to pay claims in a way that is consistent with the approved Plan of Reorganization. The payment process may continue after the restructuring is complete.
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