Live Chat
During This Challenging Time

We are open for business and remain dedicated to your case! All those working on-site and remotely are still available to answer your questions. The well-being of our clients and staff are vital, so we will provide updates as the situation progresses.

During This Challenging Time Close

American Airlines Files A “Business Bankruptcy”

November 30, 2011

The United States Bankruptcy Code is comprised of several different chapters. Some chapters deal with administrative matters. Other chapters provide specific guidance on how a case must proceed. Chapter 13, a repayment bankruptcy, is reserved for debtors who are “natural persons,” as opposed to businesses or corporations. Businesses and individuals can file Chapter 7, a liquidation bankruptcy, but only individuals can receive a Chapter 7 discharge. When businesses need to restructure, they turn to Chapter 11, commonly called the “business bankruptcy.”

Recently the parent company of American Airlines filed for Chapter 11 bankruptcy protection. Chapter 11 is a business reorganization, not a liquidation, and has been used by several other airline companies (including Delta and United) to rewrite union contracts and reduce debt. American Airlines will continue to operate during the bankruptcy and travelers will see very little change – at least during the early phases of the bankruptcy.

American Airlines has declared bankruptcy because it needs protection from creditors to continue to operate while it reorganizes its finances. According to an article in the Wall Street Journal, AMR reports that it has $29.6 billion in debt and $24.7 billion in assets. On the day it filed for bankruptcy, AMR requested permission from a New York bankruptcy court judge to pay for fuel, labor, and other critical expenses to keep American flying. During Chapter 11 bankruptcy, all major financial decisions must be approved through the bankruptcy court.

Attorney Harvey Miller, who represents AMR, offered a great piece of bankruptcy advice for struggling businesses. At the AMR bankruptcy hearing, Miller said that debtors should not “wait too long. Don’t wait until the course is irreversible. That is what American Airlines is doing today.”

If your business is fighting to stay alive, consult with an attorney and discuss how the federal bankruptcy law can help. Chapter 11 can stop creditor action while your business develops a plan for reorganization. Every debtor’s situation is different, and an experienced bankruptcy attorney can explain the process and benefits of Chapter 11 for your company.


Use the form below to send us a note, call us at 214.890.0711 or chat with us live. We are eager to help with your legal needs. Please keep in mind that any unsolicited information sent through our website cannot be treated as confidential. Contacting us through this site does not create a representation relationship with Fears Nachawati.

Contact Us


With offices across Texas, and attorneys licensed in Texas, Florida, Arkansas, New Mexico, California, Illinois, District of Columbia, Missouri and Oklahoma, Fears Nachawati is dedicated to attaining the best possible solutions for our clients’ business and personal needs. We strive to be professionals who are creative, empathetic and reliable.

All Areas Served

We Can Help

Contact Fears Nachawati today

Free Consultation

Live Chat (Online Now)