A group of AMR Corp. bondholders with about $885 million in debthas told pilots that its support for a stand-alone AmericanAirlines after bankruptcy would be conditioned on the appointmentof a new board.

The debt owners detailed that stance in a letter to AlliedPilots Association President Keith Wilson that was posted on aportion of the union website yesterday. According to a Septembercourt filing, the group included JPMorgan Chase & Co. andPentwater Capital Management LP.

While the ad hoc bondholders don't hold a seat on AMR'sunsecured creditors committee, the group has come together to seekan official voice in the restructuring. Fort Worth, Texas-based AMRhas said it prefers to leave bankruptcy as an independent company,while US Airways Group Inc. has been pushing for a merger with thethird-largest U.S. airline.

“As material stakeholders of the debtors, we intend to be one ofthe primary negotiators of any plan of reorganization,” Gerard Uzziof law firm Milbank, Tweed, Hadley & McCloy LLP wrote in theletter, which was dated Nov. 15.

AMR said in August that the group was interested in providingfinancing for a restructuring, and the company won bankruptcy courtapproval in September to move forward on talks with the ad hocbondholders. American will pay for the 12-member group'sadvisers.

“Our support for a stand-alone plan of reorganization for AMRwill be conditioned, among other things, on that plan providing forthe naming of a new board of directors,” Uzzi wrote in the letterfor the bondholders group.

Messages left for Uzzi by phone and e-mail about the group'scurrent membership weren't immediately returned. Mike Trevino, anAmerican spokesman, declined to comment on the bondholders'letter.

Labor-management relations have long been strained at American,where five years of union talks starting in 2006 failed to helpbring the savings that AMR said it needed to avert a bankruptcyfiling. American's unions have backed a merger with US Airways, thefifth-biggest U.S. carrier.

The bondholders expect a new AMR board to consist “of mostlyindividuals without prior affiliation with the company,” Uzziwrote.

The group's reference only to a stand-alone reorganization planshouldn't be viewed as a sign of support for that option or amerger, the Allied Pilots Association told members. A merger wouldforce a change in AMR's board.

'Written Commitment'

“This letter provides APA with the benefit of a writtencommitment by the ad hoc group stating it will not agree to a planof reorganization that does not otherwise include a new independentAMR board of directors and that key stakeholders, including labor,will be a part of that selection process,” the union told itsmembers.

American pilots are voting on a tentative labor agreement withthe carrier that would give them a 13.5 percent stake in therestructured company.

“Selecting the right leadership, board of directors andstrategic plan for this company is of critical importance to ourpilots, and we now have a commitment from that creditor group tohelp us pursue that end goal,” Dennis Tajer, an APA spokesman, saidin an interview.

American filed for bankruptcy protection one year ago tomorrow.The case is In re AMR Corp., 11-15463, U.S. Bankruptcy Court,Southern District of New York (Manhattan).

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