Bankruptcy Judge Stops Huge Severance Deal for American Airlines CEO

A bankruptcy judge put his foot down and denied a $20 million severance package for the outgoing CEO of American Airlines, which filed for bankruptcy a few months ago, according to a USA Today report. Sources say American Airlines, which is in the midst of a controversial merger with US Airways, proposed an exorbitant severance payment for Tom Horton, the company’s former CEO. This week, however, Judge Sean Lane refused to approve the compensation package because the payment would have exceeded the cap for such payments established by new bankruptcy laws that were passed in 2005.