In Re AMR Corporation

730 F.3d 88 (2013)

From our private database of 46,500+ case briefs, written and edited by humans—never with AI.

In Re AMR Corporation

United States Court of Appeals for the Second Circuit
730 F.3d 88 (2013)

  • Written by Rose VanHofwegen, JD

Facts

AMR Corporation (debtor), parent to American Airlines (American), filed a voluntary bankruptcy petition to reorganize in 2011. U.S. Bank National Trust Association (US Bank) held notes as trustee that American used to finance aircraft. The indenture and security agreements required American to pay a make-whole payment if it redeemed the notes before maturity, only if the redemption was voluntary. If the debt automatically accelerated because of a default, the indentures specified that “[n]o Make-Whole Amount shall be payable.” The indentures defined filing a voluntary bankruptcy petition or a voluntary petition “seeking reorganization, liquidation, or other relief as a debtor” as an “Event of Default” that triggered automatic acceleration. The trustee had discretion over whether to accelerate if other types of default events occurred, but not a voluntary bankruptcy. A month after filing, American elected under Bankruptcy Code § 1110 to agree to perform its obligations to creditors with a secured interest in its aircraft and cure any default within a certain time frame to receive protection under the automatic stay. Effectively that allowed American to keep flying its planes instead of having them repossessed. American made its regular payments for nine months, then requested authorization to obtain $1.5 billion in postpetition financing to repay the notes without paying a make-whole amount. US Bank objected, insisting that American pay the make-whole amount under the indentures’ voluntary-redemption provisions. The court nonetheless approved the new financing and repayment without a make-whole amount. US Bank appealed.

Rule of Law

Issue

Holding and Reasoning (Livingston, J.)

What to do next…

  1. Unlock this case brief with a free (no-commitment) trial membership of Quimbee.

    You’ll be in good company: Quimbee is one of the most widely used and trusted sites for law students, serving more than 832,000 law students since 2011. Some law schools even subscribe directly to Quimbee for all their law students.

  2. Learn more about Quimbee’s unique (and proven) approach to achieving great grades at law school.

    Quimbee is a company hell-bent on one thing: helping you get an “A” in every course you take in law school, so you can graduate at the top of your class and get a high-paying law job. We’re not just a study aid for law students; we’re the study aid for law students.

Here's why 832,000 law students have relied on our case briefs:

  • Written by law professors and practitioners, not other law students. 46,500 briefs, keyed to 994 casebooks. Top-notch customer support.
  • The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
  • Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
  • Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.

Access this case brief for FREE

With a 7-day free trial membership
Here's why 832,000 law students have relied on our case briefs:
  • Reliable - written by law professors and practitioners, not other law students
  • The right length and amount of information - includes the facts, issue, rule of law, holding and reasoning, and any concurrences and dissents
  • Access in your class - works on your mobile and tablet
  • 46,500 briefs - keyed to 994 casebooks
  • Uniform format for every case brief
  • Written in plain English - not in legalese and not just repeating the court's language
  • Massive library of related video lessons - and practice questions
  • Top-notch customer support

Access this case brief for FREE

With a 7-day free trial membership