Pilots union seeks halt of Leonidas action in AMR/U.S. Airways merger

By Jim Witters

Wilmington, Del., March 6 - The planned merger between American Airlines, Inc. parent AMR Corp. and US Airways Group, Inc. is jeopardized by an adversary action threatened by Leonidas, LLC, according to documents filed March 6 in the U.S. Bankruptcy Court for the Southern District of New York by the US Airlines Pilots Association.

The union, which represents thousands of mainline pilots in the US Airways Group, Inc., is asking the court to enjoining Leonidas from pursuing its action.

The Leonidas action violates the bankruptcy courts' automatic stay of other legal proceedings, the pilots union says.

The disagreement between Leonidas and the pilots union stems from a dispute over seniority rights arising from the 2005 merger of US Airways and America West into a single carrier operating under the name of US Airways.

Dispute background

Leonidas, LLC was created in August 2007 by several former America West pilots to safeguard the legal rights of America West pilots after the merger with US Airways.

The seniority dispute has been the subject of litigation in the U.S. District Court for the District of Arizona.

Leonidas is raising the seniority issue in the AMR case, challenging a memorandum of understanding between the airlines and the pilots union regarding collective bargaining agreements and the effect of the merger on the pilots.

The memorandum of understanding was approved by 76% of the union pilots, including 97.7% of the Phoenix-based pilots whom Leonidas purports to represent, according to the pilots union's filing.

Affect on merger

"If the defendant is permitted to prosecute the action, there is no question that the action itself would distract parties in interest, such as USAPA, US Airways and debtors, from the important negotiations and tasks attendant to the merger, would disrupt the orderly integration of the pilot work force, and any injunctive relief granted would have a material and direct impact on the ability of debtors to consummate the merger," according to the union's filing.

The union is asking the court to

• Declare that Leonidas has impermissibly interfered with the bankruptcy court's jurisdiction and mandate;

• Declare that the Leonidas action violates the automatic stay; and

• Preliminarily and permanently enjoin Leonidas from interfering with the bankruptcy court's jurisdiction over the debtors' Chapter 11 cases and the merger by prosecuting the action.

No hearing on the pilots union request has been scheduled.

The court will hold a hearing on debtors' motion to approve the merger on March 27.

AMR Corp., the Fort Worth, Texas-based parent of American Airlines, filed for bankruptcy on Nov. 29, 2011 in the U.S. Bankruptcy Court for the Southern District of New York. Its Chapter 11 case number is 11-15463.

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