American Airlines undecided about bankruptcy filing


Aug 20, 2002
Published March 29, 2003 AMR29

Executives at American Airlines are divided on whether to file for bankruptcy protection, though the company is still asking bankers to put together financing, one banker said.

The banker said American executives had fallen into two camps. CEO Donald Carty and several colleagues want to avoid bankruptcy and would rather work out labor and supplier concessions outside of court, he said.

But executives close to Carty argue that there is no way American can avoid seeking Chapter 11, no matter what it does, because of the bleak industry outlook, he said.

On Thursday, two bankers said American might file for bankruptcy as early as next week because of a steep decline in revenue. But with the executives still debating the prospect, the timing seems uncertain, one banker said.

Bankers say American is trying to put together more than $1.5 billion in debtor-in-possession financing that would allow it to keep operating if it filed for bankruptcy protection.

Stock of American''s parent, AMR Corp., fell 21 cents to $1.58 Friday.

New York Times