Experts told Reuters if the Justice Department should succeed in the anti-trust case it filed against the merger of AMR and US Airways, it would be akin to AMR having a second bankruptcy. AMR Corp, the parent company of American Airlines, filed for bankruptcy in 2011. Seton Hall University School of Law Professor Stephen Lubben, who is also an expert on bankruptcy, said AMR would have to go back to the drawing board if the government succeeds. AMR Corp would need to determine how to settle the debts it owes to creditors, find money to begin restructuring and ultimately look for ways to enhance its business model.
Experts also forecasted shareholders to take a hit should the deal collapse. The investors were supposed to have a 3.5% stake in the merged firm. It would have been one of the few bankruptcies where shareholders would be able to get something out of the deal.
The Justice Department filed the anti-trust case on Tuesday. It said that the merger would reduce competition in the industry. This would lead to higher fares and fees which would hurt consumers.
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