U.S. Bankruptcy Judge Sean Lane approved American Airlines and US Airways merger agreement at a court hearing on Wednesday.
Lane also extended American's request for more time to file its reorganization plan. American's parent company, AMR Corp., now has until May 29 to file the plan.
“The merger is an excellent result. I don’t think anybody disputes that,” Lane said during a court hearing, the Associated Press reported.
However, Lane did not approve American CEO Tom Horton's $20 million severance package. The U.S. bankruptcy trustee had objected to the severance that would be paid to Horton when the merger closed, saying it did not conform to bankruptcy law.
Instead, Lane will consider the severance as part of the company's reorganization plan. He will also issue a written decision at a later date on his ruling.
The merger, which was announced on Feb. 14, still needs approval from government regulators and US Airways shareholders. The carriers have said they expect the deal to close in September.
UPDATE: Here is a joint statement issued by American and US Airways. "Judge Lane’s approval of the merger agreement today allows us to continue progressing forward with our planned merger and we are gratified to know that he considers the merger an “excellent result” for stakeholders. The Court approved the merger agreement but deferred ruling on Mr. Horton’s compensation arrangement."