Unresolved issues surrounding American Airlines' contract with Citibank, which issues its co-branded frequent flier credit card, threaten to derail the bankrupt airline's efforts to reorganize and merge with US Airways, according to court documents Citi filed on May 24.
Since American Airlines parent company AMR Corp. filed for bankruptcy in November 2011, the contract with Citi to operate the Citibank AAdvantage Program has remained in effect on an interim basis. In a motion filed with a federal bankruptcy court in New York, Citi requested that the judge overseeing the case require American to make a final decision to continue to honor the contract.
"Were the Agreements to be rejected, Citibank would have a multibillion-dollar claim secured by some of the Debtors' most valuable assets, including virtually the entirety of the AAdvantage Program itself," Citi says in its filing.
