Bankruptcy Judge Says AMR Can't Cut Retiree Benefits Judge Says Former American Airlines Parent's Benefit Programs Lack Language Allowing It To Modify Them

Bankruptcy Judge Says AMR Can't Cut Retiree Benefits
Judge Says Former American Airlines Parent's Benefit Programs Lack Language Allowing It To Modify Them
http://online.wsj.com/news/articles/SB1000142405270230462630457950981336...

By JACQUELINE PALANK CONNECT
April 18, 2014 2:38 p.m. ET
A bankruptcy judge ruled that former American Airlines parent AMR Corp. doesn't have the unilateral right to terminate benefits to about 46,930 retirees.

Judge Sean H. Lane of the U.S. Bankruptcy Court in Manhattan on Thursday denied AMR's request, brought during its 2011 Chapter 11 case, that it could unilaterally modify the health and welfare benefits it offered its retirees because its benefit programs "lack language categorically reserving" its right to do so. AMR had sought to shift the cost of the benefits to its retirees, who include union and nonunion members.

"We thank Judge Lane for his thoughtful consideration of the issues. American will review his ruling and consider next steps related to the retiree health and life insurance benefits. We always remain open to productive discussions to finally resolve this matter," American Airlines spokesman Casey Norton said Friday in an emailed statement.

Attorneys who represented AMR and its retirees in the bankruptcy case couldn't immediately be reached for comment Friday afternoon.

AMR sought Chapter 11 protection in November 2011 in a bid to address its high labor costs. The company exited bankruptcy last November through its merger with US Airways Group Inc. The merged company now operates as American Airlines Group Inc.AAL -0.31%

Write to Jacqueline Palank at jacqueline.palank@wsj.com