Judge indicates support for American-US Air deal

Tim Sloan/AFP/Getty Images

NEW YORK A federal bankruptcy judge is signaling his support for the $11 billion merger of American Airlines and US Airways (LCC).

But Judge Sean H. Lane deferred giving his official blessing until he could further consider the timing of a severance package for outgoing American CEO Tom Horton.

"The merger is an excellent result. I don't think anybody disputes that," Lane said Wednesday during a court hearing. American has been in bankruptcy protection since November 2011.

The companies have proposed paying Horton $20 million in severance. Horton has agreed to step down as CEO and leave the company within a year of the merger's closing.

Lane expressed concern that awarding a CEO such a large payment at this point in the restructuring process would violate prohibitions in the bankruptcy law.

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