April 21, 2014

A Jenner & Block team representing the American Airlines’ Section 1114 Retiree Committee has successfully fended off an attempt by the airline’s parent company, AMR Corp., to terminate benefits for nearly 47,000 retirees, including former pilots, flight attendants and other union and non-union workers.  On April 18, 2014, U.S. Bankruptcy Judge Sean Lane in New York rejected a motion AMR made in 2012 seeking a declaration that AMR and American had the right to terminate the health and welfare benefits that American provides to its retirees.  The Court rejected AMR’s arguments that the benefits were not vested as a matter of law.  It also rejected AMR’s argument that it could modify the benefits by moving all of the costs for those benefits to the retirees.  AMR will now need to proceed to trial should it continue to seek a ruling holding that it has the right to terminate the retirees' benefits.

Jenner & Block Partner Catherine L. Steege was quoted in the media as saying that she hoped that, in light of the ruling, AMR would “reconsider its efforts to try to take away benefits from the retirees.  These people worked long and hard and loyally for American Airlines and they made it into the airline it has become.  They should share in the prosperity.”

News of the ruling was covered by the Wall Street Journal, Reuters, Law360 and Dallas News (subscriptions may be required to access).

In addition to Cathy, other team members included Partners Charles B. Sklarsky, Melissa M. Root, Barry Levenstam, Marc B. Hankin, Jeffrey A. Koppy and Reena R. Bajowala and Associates Angela M. Allen, Michael J. Kelly, Landon S. Raiford, David L. Russell and Carl N. Wedoff.