American Airlines and the unsecured creditors’ committee in its Chapter 11 case jointly asked the bankruptcy court overseeing the proceedings to again extend the exclusive period during which only the company can file a reorganization plan, this time an additional 42 days, to March 11, 2013, saying it would use the additional time “to develop and build consensus for a feasible Chapter 11 plan.”

American and the panel also want to extend the corresponding period to solicit acceptances to a reorganization plan, though May 10, 2013.

The company’s current exclusivity period is set to expire on Jan. 27. Last July, the company won an exclusivity extension through Dec. 28, but in October, significantly before that deadline, American and the creditors’ committee filed a joint motion, and ultimately were granted, an extension of the exclusivity period to its current Jan. 27 deadline.

The company said at the time it required the additional exclusivity because it had spent a considerable amount of time during its Chapter 11 on issues other than developing a reorganization plan, citing its resolution of labor issues with some 55,000 unionized employees.

As reported, the company has concluded new labor pacts with two of its unions, and recently reached a final, tentative agreement with its pilots unions, the Allied Pilots Association, that is currently before the members for a vote that is expected to be concluded by Dec. 7.

In requesting the extension, the company and the committee cited, among other factors, the size and complexity of the case, again citing the significant time spent on labor issues. And as with prior exclusivity requests, the company and the panel cited their “collaborative, cooperative, [and] viable working relationship.”

According to the Nov. 30 filing, “American is continuing the process of refining its business plan with the [creditors’ committee],” and American and the panel “are pursuing their collaborative review of strategic alternatives that might be beneficial to American’s economic stakeholders and the enterprise,” which is typically a legal filings’ euphemism for a potential merger. More specifically, the motion said that American has “exchanged confidential information pursuant to a nondisclosure agreement with US Airways Group as part of the strategic alternative evaluations.”

US Airways has publicly sought a merger with American, and is considered to be American’s most likely partner should it decide to go that route to emerge from Chapter 11.

The motion also said American was working with the PBGC “regarding the freezing of American’s defined benefit pension programs.”

A hearing is scheduled for Dec. 19.

If granted, this would be American’s fourth exclusivity extension. The company filed for Chapter 11 on Nov. 29, 2011. Under the Bankruptcy Code, the maximum amount of time for which a company can maintain the exclusive right to file a reorganization plan is 18 months, with 20 months the maximum exclusivity period for soliciting acceptances to a plan. For American, those deadlines would fall on May 29 and July 29, respectively. – Alan Zimmerman

Hostess Brands today won final bankruptcy-court approval of its wind-down plan and up to $1.8 million in incentive payments for 19 company executives overseeing the liquidation.

U.S. Bankruptcy Judge Robert Drain issued his ruling from the bench this afternoon at a hearing in White Plains, N.Y.

Judge Drain granted interim approval of the Hostess wind-down plan following a Nov. 21 hearing. But in an objection filed this week, the Bakery, Confectionery, Tobacco and Grain Millers Union and the Bakery and Confectionery Union and Industry International Pension Fund argued that a Trustee should be appointed to oversee the liquidation because the company’s financial advisors presented asset-liquidation valuations at the interim hearing that were wildly different than previously estimates. (See, “Hostess liquidation valuation at issue in bakers’ objection to plan,” LCD News, Nov. 27, 2012).

In his testimony during the Nov. 21 hearing, Hostess financial advisor Joshua Scherer, of Perella Weinberg, said the company’s assets are currently worth more than $1 billion. With secured claims of roughly $900 million and administrative claims of $100-150 million, that valuation means the estate could still be administratively solvent, a factor Drain considered when he denied a motion by the U.S. Trustee to convert the case to Chapter 7.

But in further testimony at today’s hearing, Hostess advisors said the company estimated in 2011 that its assets were worth as little as $250 million in a liquidation scenario. What has changed since then? The value of the “intangibles,” said a Hostess financial consultant from FTI. The company’s 30 brands and numerous trademarks have generated an unanticipated amount of interest since Hostess announced it would liquidate.

Scherer said today that Hostess is now in “active dialogue” with about 110 interested buyers, 70 of whom have signed non-disclosure agreements. “To be honest, it’s been so fast and furious we haven’t had a chance to make all the outbound calls we planned,” he said. Those potential buyers include about 25 regional bakeries, “large, brand-name companies,” national retailers, and at least two parties interested in distribution rights in India.

“We have several parties that are looking at a substantial majority of all of our plants, all of our facilities, which I’ll admit was unexpected,” Scherer continued. At least six of those potential buyers have retained large investment banks, which Scherer said indicates not only that they are serious, but that they expect to spend substantial sums. “Typically you’re not hiring a large investment bank unless you’re doing multi-hundred-million-dollar transactions,” he said.

“I’m more confident than I was last week that administrative claims will be paid in full,” Scherer added.

Judge Drain also approved an executive-incentive plan covering 19 employees overseeing the wind-down process, which Hostess expects will take about one year. Hostess CEO Gregory Rayburn did not ask for a bonus and is not included under the plan, Drain pointed out. Assuming they meet the milestones outlined in the plan, the executives will split up to $1.8 million, a figure that is below market rate for their work, Drain noted. – John Bringardner