On March 8, 2012, AMR filed a motion pursuant to section 1121(d) of the Bankruptcy Code requesting an extension of their exclusive period to file a chapter 11 plan from March 28, 2012 through and including September 28, 2012 and their exclusive period to solicit acceptances of such plan from May 29, 2012 through and including November 29, 2012.
Section 1121(b) of the Bankruptcy Code provides for an initial period of 120 days after the commencement of a chapter 11 case during which a debtor has the exclusive right to file a chapter 11 plan (the “Exclusive Filing Period”). Section 1121(c)(3) of the Bankruptcy Code provides that if a debtor files a plan within the 120-day Exclusive Filing Period, it has an exclusive period of 180 days from the commencement date to obtain acceptances of its plan (the “Exclusive Solicitation Period”). The Debtors' initial Exclusive Filing Period and Exclusive Solicitation Period are currently set to expire on March 28, 2012 and May 29, 2012, respectively.
The hearing on this motion is scheduled for March 22, 2012 at 12:00 noon. The objection deadline is March 15, 2012 at 4:00 p.m.
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On March 8, 2012, AMR filed the attached Motion seeking to establish procedures (the "Proposed Procedures") for settling certain claims against the estate. AMR proposes three tiers of procedures for the settlement of claims where the aggregate amount to be allowed for an individual claim (the “Settlement Amount”) is (i) De Minimis, (ii) not De Minimis but less than $10 million, or (iii) not De Minimis and over $10 million.
Tier 1. Settlement Amount is De Minimis. A Settlement Amount is "De Minimis" where (i) the Settlement Amount is less than or equal to $1 million, or (ii) the Settlement Amount is within 10 percent of the noncontingent, liquidated amount listed on AMR's schedules of assets and liabilities, so long as the difference in amount does not exceed $1 million; provided, however, De Minimis Settlement Amounts shall not include (x) any settlement of a claim to which any present or former insider of AMR is a party, or (y) any settlement of a claim that includes a release of avoidance actions.
The Proposed Procedures provide that AMR will be authorized to enter into settlements where the Settlement Amount is De Minimis without prior approval of the Court or any other party in interest.
Tier 2. Settlement Amount is not De Minimis but less than $10 Million. The Proposed Procedures provide that AMR shall submit such proposed settlements to the Creditors’ Committee. Within five (5) business days of receiving the proposed settlement, the Creditors’ Committee may object or request an extension of time within which to object (which objection or request for an extension of time within which to object may be in the form of an e-mail from counsel to the Creditors’ Committee to counsel to AMR). If a timely objection is made by the Creditors’ Committee, AMR may either (a) renegotiate the settlement and submit a revised notification to the Creditors’ Committee, or (b) file a motion with the Court seeking approval of the existing settlement under Bankruptcy Rule 9019 on no less than fourteen (14) days’ notice. If no timely objection is made by the Creditors’ Committee or if AMR receive written approval from the Creditors’ Committee of the proposed settlement prior to the objection deadline (which approval may be in the form of an e-mail from counsel to the Creditors’ Committee to counsel to the Debtors), then AMR may proceed with the settlement, without prior approval of the Court.
Tier 3. Settlement Amount is not De Minimis and over $10 Million. The Proposed Procedures provide that the Debtors will seek Court approval pursuant to a Motion under Rule 9019 on no less than fourteen (14) days' notice.
The Proposed Procedures provide that AMR, on a monthly basis beginning on May 1, 2012, will give the Creditors' Committee a report of all settlements of aDe Minimis Settlement Amount entered in the preceding calendar month. Further, AMR will file with the Court and serve pursuant to the Case Management procedures, on the thirtieth (30) day after the start of a quarter, beginning with the quarter that starts on April 1, 2012, a report of all settlements entered in the prior quarter pursuant to the Proposed Procedures, excluding those settlements approved under Rule 9019.
The hearing on this motion is scheduled for March 22, 2012 at 12:00 noon. The objection deadline is March 15, 2012 at 4:00 p.m.