American Airlines Group Inc (AAL)

[NASCOW]

So in other words it was pretty much confirmed common shareholders were probably going to be canceled and now it's maybe, maybe not

In the SEC filing, American cautioned that investors shouldn't place undue reliance on the information in Miller's letter, "which was not prepared for the purpose of providing the basis for an investment decision relating to any of (its) securities. No assurance can be given as to the ultimate value, if any, that may be ascribed to...AMR's equity securities," it said.

AMR Lawyer: 'Possibility' Equity Holders Will Get Value in Bankruptcy
15 hours 23 minutes ago - Dow Jones News


By Susan Carey

American Airlines parent AMR Corp., which has been reorganizing in bankruptcy-court protection for 13 months, now believes the value of the company has "appreciated" enough to provide a "reasonable possibility" that common equity holders could receive some value for their shares, the company's lead bankruptcy lawyer said in a Jan. 3 letter to the Office of the U.S. Trustee for the federal bankruptcy court in Manhattan, where the case is proceeding.
The letter, disclosed in a Securities and Exchange Commission filing Tuesday, was written by Harvey Miller of Weil, Gotshal & Manges LLP to Brian Masumoto, a Justice Department attorney in the Office of the U.S. Trustee. Miller cited two letters dating back about a year to an AMR shareholder who had requested that the court appoint a committee to look after the interests of AMR common shareholders in the bankruptcy.
At the time, Miller said AMR opposed the appointment of such a committee "on the primary ground that there did not appear to be a substantial likelihood that equity holders of AMR would receive any meaningful distribution" in the bankruptcy case. The letters also said equity holders appeared able to adequately represent their interests without an official committee.
But in the past year, AMR has "made remarkable progress in stabilizing their business and improving their prospects," Miller said in the letter of last week. The company, its creditors and "others" are currently in the process of exploring strategic alternatives to effectuate the reorganization of AMR, he said. "In that connection, it appears that the value of (AMR) has significantly appreciated. Depending upon the ultimate strategic alternative adopted and pursued, there exists a reasonability possibility that there may be value for AMR equity holders."
The main strategic alternative to a plan in which AMR steps out of court protection on its own is a rival plan for it to merge with US Airways Group Inc. (LCC) as the bankruptcy-emergence vehicle. The two companies have been engaged in confidential talks for the past five months on such a plan, and AMR's creditors are eager to explore the choices to see which delivers most value to them and which builds the strongest company.
Often in bankruptcy cases, holders of common stock receive nothing for their shares, as they are lowest on the pecking order after secured creditors and unsecured creditors. The latter groups normally receive new shares in the reorganized company commensurate with some portion of their claims. AMR's common shares still are trading, but are expected to be extinguished when the company steps out of court protection and begins trading its new shares.
In the SEC filing, American cautioned that investors shouldn't place undue reliance on the information in Miller's letter, "which was not prepared for the purpose of providing the basis for an investment decision relating to any of (its) securities. No assurance can be given as to the ultimate value, if any, that may be ascribed to...AMR's equity securities," it said.