American Airlines sues to stop paying benefits to retirees

by DeLadurantey Law Office, LLC on July 10, 2012

American Airlines and its parent company, AMR Corp., have recently filed a lawsuit as a part of their bankruptcy case that would allow them to stop paying life insurance and health care benefits to retirees.

The lawsuit was filed on Friday in New York. Officials with American Airlines are hoping that a bankruptcy judge will see this cost-cutting attempt as a “sound business judgment.”

The company also stated that it never promised to provide the benefits for life,  and it has the right to change the scope of benefits whenever it sees fit. The company currently has about 40,000 retirees.

Officials with AMR Corp. stated that the changes to the benefits plan will be similar to what the current active employees will receive when they retire. The spokesperson also said that the bankruptcy restructuring process is something that is difficult for everyone, and they understand that a change in benefits may be very “concerning.”

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