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HEARING DATE AND TIME: November 8, 2012 at 11:00 a.m. (Eastern Time) OBJECTION DEADLINE: November 1, 2012 at 4:00 p.m. (Eastern Time)

WILMER CUTLER PICKERING HALE AND DORR LLP 7 World Trade Center New York, New York 10007 Telephone: 212.937.7232 Facsimile: 212.230.8888 Philip D. Anker George W. Shuster, Jr. Attorneys for Marathon Asset Management, LP UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK -----------------------------------------------------------------x In re : : AMR CORPORATION, et al., : : Debtors. : : -----------------------------------------------------------------x

Chapter 11 Case No. 11-15463 (SHL) (Jointly Administered)

NOTICE OF HEARING ON MOTION OF MARATHON ASSET MANAGEMENT, LP FOR THE APPOINTMENT OF AN EXAMINER PURSUANT TO 11 U.S.C. 1104(c) RELATED TO THE MOTION OF DEBTORS FOR ORDER PURSUANT TO 11 U.S.C. 105(a), 363 AND 1110 AND FED. R. BANKR. P. 9019(a) APPROVING COMPROMISE AND SETTLEMENT, AUTHORIZING ENTRY INTO TERM SHEETS RELATING TO 21 ERJ135, 59 ERJ140, AND 118 ERJ145 AIRCRAFT AND GRANTING RELATED RELIEF, AND TRANSACTIONS DESCRIBED THEREIN PLEASE TAKE NOTICE that a hearing on the annexed motion, dated October 23, 2012 (the Motion) of Marathon Asset Management, LP (Marathon), on behalf of one or more managed funds and/or accounts, will be held before the Honorable Sean H. Lane, United States Bankruptcy Judge, in Room 701 of the United States Bankruptcy Court for the Southern District of New York (the Bankruptcy Court), One Bowling Green, New York, New York 10004, on November 8, 2012 at 11:00 a.m. (Eastern Time), or as soon thereafter as counsel may be heard. PLEASE TAKE FURTHER NOTICE that any responses or objections to the Motion (the Objections) must be in writing, shall conform to the Federal Rules of Bankruptcy Procedure and the Local Bankruptcy Rules for the Southern District of New York, and shall be filed with the
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Bankruptcy Court (a) by registered users of the Bankruptcy Courts case filing system, electronically in accordance with General Order M-399 (which can be found at http://nysb.uscourts.gov) and (b) by all other parties in interest, on a 3.5 inch disk, in text-searchable portable document format (PDF) (with a hard copy delivered directly to Chambers), in accordance with the customary practices of the Bankruptcy Court and General Order M-399, to the extent applicable, and served in accordance with General Order M-399 and on (i) the attorneys for the Debtors, Weil, Gotshal & Manges LLP, 767 Fifth Avenue, New York, New York 10153 (Attn: Stephen Karotkin, Esq.), (ii) the Debtors, c/o AMR Corporation, 4333 Amon Carter Boulevard, MD 5675, Fort Worth, Texas 76155 (Attn: Kathryn Koorenny, Esq.), (iii) the Office of the United States Trustee for the Southern District of New York, 33 Whitehall Street, 21st Floor, New York, New York 10004 (Attn: Brian Masumoto, Esq.), (iv) the attorneys for the Official Committee of Unsecured Creditors, Skadden, Arps, Slate, Meagher & Flom LLP, 155 North Wacker Drive, Chicago, Illinois 60606 (Attn: John Wm. Butler, Jr., Esq.) and Four Times Square, New York, New York 10036 (Attn: Jay M. Goffman, Esq.), (v) the attorneys for the Section 1114 Committee of Retired Employees, Jenner & Block LLP, 353 North Clark Street, Chicago, Illinois 60654 (Attn: Catherine L. Steege, Esq. and Charles B. Sklarsky, Esq.) and 919 Third Avenue, 37th Floor, New York, New York 10022 (Attn: Marc B. Hankin, Esq.), (vi) the attorneys for Marathon, Wilmer Cutler Pickering Hale and Dorr LLP, 7 World Trade Center, New York, New York 10007 (Attn: Philip D. Anker, Esq. and George W. Shuster, Jr., Esq.), and (vii) all entities that requested notice in these chapter 11 cases under Fed. R. Bankr. P. 2002 so as to be received no later than November 1, 2012 at 4:00 p.m. (Eastern Time) (the Objection Deadline). PLEASE TAKE FURTHER NOTICE that if no Objections are timely filed and served, the Indenture Trustee and Marathon may, on or after the Objection Deadline, submit to the Bankruptcy

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Court an order substantially in the form of the proposed order annexed to the Motion, which order may be entered with no further notice or opportunity to be heard.

Dated: New York, New York October 23, 2012 WILMER CUTLER PICKERING HALE AND DORR LLP

/s/ George W. Shuster, Jr. Philip D. Anker George W. Shuster, Jr. 7 World Trade Center New York, New York 10007 Telephone: 212.937.7232 Facsimile: 212.230.8888 Attorneys for Marathon Asset Management, LP

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HEARING DATE AND TIME: November 8, 2012 at 11:00 a.m. (Eastern Time) OBJECTION DEADLINE: November 1, 2012 at 4:00 p.m. (Eastern Time)

WILMER CUTLER PICKERING HALE AND DORR LLP 7 World Trade Center New York, New York 10007 Telephone: 212.937.7232 Facsimile: 212.230.8888 Philip D. Anker George W. Shuster, Jr. philip.anker@wilmerhale.com george.shuster@wilmerhale.com Attorneys for Marathon Asset Management, LP UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK -----------------------------------------------------------------x In re : : AMR CORPORATION, et al., : : Debtors. : : -----------------------------------------------------------------x

Chapter 11 Case No. 11-15463 (SHL) (Jointly Administered)

MOTION OF MARATHON ASSET MANAGEMENT, LP FOR THE APPOINTMENT OF AN EXAMINER PURSUANT TO 11 U.S.C. 1104(c) RELATED TO THE MOTION OF DEBTORS FOR ORDER PURSUANT TO 11 U.S.C. 105(a), 363 AND 1110 AND FED. R. BANKR. P. 9019(a) APPROVING COMPROMISE AND SETTLEMENT, AUTHORIZING ENTRY INTO TERM SHEETS RELATING TO 21 ERJ135, 59 ERJ140, AND 118 ERJ145 AIRCRAFT AND GRANTING RELATED RELIEF, AND TRANSACTIONS DESCRIBED THEREIN Marathon Asset Management, LP (Marathon), on behalf of one or more managed funds and/or accounts, by and through their undersigned counsel, submits this motion (the Motion) for the appointment of an examiner to investigate and report on (1) the intercompany transactions that occurred among American Eagle Airlines, Inc. (American Eagle), American Airlines, Inc. (American Airlines), and AMR Corporation (AMR) in the months immediately preceding the filing of the chapter 11 cases of AMR and its affiliated debtors (collectively with AMR, the Debtors), (2) any claims or other rights that the Debtors may hold in respect of these transactions,

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and (3) the potential effects on any such claims or other rights of the proposed compromise between the Debtors and Agncia Especial de Financiamento Industrial (FINAME) and Banco Nacional de Desenvolvimento Econmico e Social (BNDES and together with FINAME, the Financing Parties), as embodied in the Debtors Motion of Debtors for Order Pursuant to 11 U.S.C. 105(a), 363, and 1110 and Fed. R. Bankr. P. 9019(a) Approving Compromise and Settlement, Authorizing Entry into Term Sheets Relating to 21 ERJ135, 59 ERJ140, and 118 ERJ145 Aircraft and Granting Related Relief [Docket No. 4936] (the Rule 9019 Motion).1 The appointment of an examiner to conduct an investigation of these matters under the circumstances present in the Debtors cases is mandatory, appropriate, and in the best interests of the Debtors creditors and other parties in interest under section 1104(c) of title 11 of the United States Code (the Bankruptcy Code). In support of the Motion, Marathon respectfully represents as follows: PRELIMINARY STATEMENT 1. In the weeks leading up to the filing of the Debtors chapter 11 cases, American

Eagle and American Airlines consummated a series of intercompany transactions that resulted in American Airlines assuming $2.26 billion of dollars in additional debt that American Eagle previously owed to the Financing Parties (the Prepetition Transactions). On their face, the Prepetition Transactions raise serious questions as to whether American Airlines received fair value in exchange for incurring the billions of dollars in debt and as to whether these transactions were otherwise improper. 2. The Debtors have stated in the Rule 9019 Motion that they have considered whether

the Prepetition Transactions were appropriate and whether the Prepetition Transactions are potentially subject to avoidance as fraudulent transfers. The Debtors have reached a judgment that

Marathon has filed, contemporaneously with this Motion, an objection to the Debtors Rule 9019 Motion. Many of the arguments in this Motion overlap with those in the objection, and, in the interests of avoiding duplication, Marathon incorporates in this Motion, by reference, the arguments in the objection.

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claims related to the Prepetition Transactions are not supported by the facts or applicable law. (Rule 9019 Motion at 32.) However, the Debtors only spend 5 paragraphs in the Rule 9019 Motion, which runs to 365 pages including attachments, discussing potential claims in respect of the Prepetition Transactions. Those few paragraphs contain mostly unsupported, conclusory statements. 3. The fact is that the Debtors are simply not in a position to conduct an independent

review of these issues. First, the Debtors are operated today by the same management that apparently designed, approved, and consummated the Prepetition Transactions. It is not possible for that same management to undertake an objective and critical review of the same Prepetition Transactions in which they were previously involved. 4. Second, the issues surrounding the Prepetition Transactions are not issues that all of

the Debtors can properly consider on a collective basis. The Prepetition Transactions involve billions of dollars in value that shifted among the Debtors, as a result of which American Eagle and AMR may have been winners at the expense of American Airlines being a loser. It is unfair to expect that the Debtors could collectively conduct a proper investigation of the Prepetition Transactions with a focus on the individual interests of the American Airlines estate. And the results of any such collective investigation by the Debtors cannot be properly relied upon by American Airlines creditors.2 5. Third, the Prepetition Transactions have become an issue in these chapter 11 cases

now because the Debtors have sought the approval of debt-restructuring transactions that would reduce or eliminate the ability of American Airlines to seek redress if, in fact, any portion of the
2

Similarly, while Marathon is unaware of any detailed investigation of the Prepetition Transactions to date by the Official Committee of Unsecured Creditors (the Committee), any such investigation by the Committee would suffer from this same defectthat the investigation would be from the perspective of the Debtors estates as a whole, and not from the perspective of the American Airlines estate in particular. See Keene Corp. v. Coleman ( In re Keene Corp.), 164 B.R. 844, 856 (Bankr. S.D.N.Y. 1994) (While a creditors committee is well suited to overseeing the operations of a business, especially the financial and economic aspects of the debtors operations, the examiner is far better able to undertake an in-depth investigation . . .) (quoting In re 1243 20th Street, Inc., 6 B.R. 683, 686 (Bankr. D.D.C. 1980)).

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Prepetition Transactions proved to be avoidable or otherwise cancellable or reversible. The Debtors first sought approval for these debt-restructuring transactions through a routine section 1110 stipulation that failed to disclose the nature and extent of the debt-restructuring transactions or their potential effects on claims related to the Prepetition Transactions. This lack of transparency, while troubling on its own, also casts a shadow on the credibility of the Debtors apparent conclusion that the Prepetition Transactions are immune from challenge. An independent examiner would be able to conduct an investigation leading to a credible conclusion, mitigating the lack of transparency in these matters to date. 6. Marathon does not believe that any claims in respect of the Prepetition Transactions

should be pursued at this stage of the Debtors chapter 11 cases, and Marathon is not requesting the appointment of an examiner with the intention of moving any such claims ahead at this time. However, Marathon also does not believe that these potential claims should be swept under the rug without due consideration. To that end, any approval by the Court of the Rule 9019 Motion, through which the Debtors now propose to extinguish American Airlines rights in respect of the Prepetition Transactions, should be conditioned upon the receipt of a report by an independent examiner stating that it is in substantial agreement with the conclusions apparently reached by the Debtors in respect of the Prepetition Transactions. BACKGROUND A. The Debtors and Marathon 7. On November 29, 2011 (the Petition Date), AMR, American Airlines, and

American Eagle, along with the other Debtors, commenced with the Court voluntary cases under chapter 11 of title 11 of the United States Code (the Bankruptcy Code). The Debtors have continued to operate their business and manage their properties as debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. On December 5, 2011, the United States 4

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Trustee for the Southern District of New York appointed the Committee pursuant to Section 1102 of the Bankruptcy Code. No trustee or examiner has been appointed in these chapter 11 cases. 8. Marathon manages one or more funds and/or accounts that hold well over a hundred

million dollars of claims against the Debtors, including substantial claims against American Airlines. B. The Prepetition Transfers 9. Prior to August 31, 2011, American Eagle owned a fleet of 216 regional jet aircraft

manufactured by Embraer (the Aircraft), which had been financed through certain prepetition mortgage financing arrangements (the Aircraft Agreements) with the Financing Parties. (Rule 9019 Motion at 6-7.) 10. In connection with the possible spin-off of American Eagle and certain of its

affiliates to AMRs stockholders, American Eagle had to clean up its over-leveraged balance sheet. To do so, from August through November 2011, American Eagle transferred 263 regional jets, including all of the Aircraft, to American Airlines, in exchange for American Airlines assumption of American Eagles outstanding debt obligations with respect to the transferred aircraft (the Prepetition Transactions). (Rule 9019 Motion at 28.) The Financing Parties agreed to release American Eagle from its outstanding obligations as to the 263 transferred regional jets and substitute American Airlines as the borrower under the Aircraft Agreements. (Id.) 11. According to the Rule 9019 Motion, at the time of the Prepetition Transactions,

American Eagles outstanding debt to the Financing Parties was approximately $2.26 billion. (Rule 9019 Motion at 29.) The Debtors claim that the value of the 263 regional jets at the time of the transfers was $1.8 billion, or $426 million less than the amount of the assumed debt. (Id.) In addition, the Debtors claim that American Eagle cancelled certain intercompany payables of American Airlines to American Eagle and settled other intercompany receivables and payables. 5

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(Id.) The Debtors have not disclosed the nature or exact net amount3 of the payables that were supposedly cancelled in the Prepetition Transactions. The Debtors only generically state that the cancelled payables were equal to the amount of the difference between the $2.26 billion in assumed debt and the purported $1.8 billion in transferred aircraft value. (Rule 9019 Motion at 29.) The Debtors also describe, only in a generic fashion, certain indirect benefits that American Airlines and AMR purportedly received in the Prepetition Transactions.4 (Rule 9019 Motion at 30.) But the Debtors do not attempt to specify or quantify those indirect benefits, or to allocate their supposed value between American Airlines and AMR. 12. While, arithmetically speaking, it appears possible from the face of the Rule 9019

Motion that the transactions entered into between American Airlines and American Eagle just before the Debtors bankruptcy filing were an even swap, there is insufficient public evidence to reach that conclusion. It is no comfort that the Debtors make a bald assertion by the Debtors that avoidance of the $2.26 billion in debt assumed by American Airlines is at best, remote. (Rule 9019 Motion at 32.) To the extent that the transactions were in fact an even swap, it is unclear why they would have helped clean up the American Eagle balance sheet for the planned spin-off, or why they would have resulted, just months later, in a proposed deal with the Financing Parties, described in the Rule 9019 Motion and below, in which American Airlines is abandoning some of the Aircraft, and in which the Aircraft Parties are agreeing that the Aircraft are worth hundreds of millions of dollars less than they were supposedly worth a year ago.

The Debtors public filings describe the cancellation of certain intercompany payables of American Airlines, but the net face amount of cancelled payables of American Airlines is unclear. See, e.g., AMR Eagle Holding Corporation, Amendment No. 1 to Form 10, Exhibit 99.1 at 13, 39 Sept. 26, 2011; American Airlines, Inc., Form 10-Q for the Quarterly Period Ending June 30, 2011 at 12-13, July 20, 2011. It is also unclear whether such net face amount must be reduced based on any invalidity of the payables or any defenses thereto. The Debtors state that the Prepetition Transactions facilitated AMR and Americans business plan and maximized the ability to source future regional feed at competitive prices. (Rule 9019 Motion at 30.) Notably, they refer to AMR and American Airlines collectively and do not focus on the independent benefits and detriments of the Prepetition Transactions to American Airlines individually.

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C.

The Section 1110 Stipulations 13. From time to time after the Petition Date, the Financing Parties and the Debtors have

entered into stipulations pursuant to section 1110(b) of the Bankruptcy Code extending the 60-day period set forth in section 1110(a)(2) of the Bankruptcy Code with respect to each Aircraft. (Rule 9019 Motion at 9.) The extensions have been conditioned on an agreement by American Airlines to make interim payments to the Financing Parties in exchange for the continuing use of the Aircraft. (Rule 9019 Motion at 10.) The Debtors entered into six such stipulations between the Petition Date and September 2012. See Docket Nos. 851, 1123, 3050, 3418, 3798 & 4066. 14. On September 8, 2012, the Debtors filed the Seventh Stipulation and Order

Approving Eighth Section 1110(b) Extension for ERJ Aircraft [Docket No. 4366] (the Seventh Stipulation). Through the Seventh Stipulation, the Debtors sought authority to extend the section 1110 period with respect to certain aircraft, as they had done in the first through sixth stipulations for the same aircraft, and, on a cursory review, the Seventh Stipulation may have appeared to be a routine pleading along the lines of the prior six filings. 15. But for the first time, the Debtors also sought through the Seventh Stipulation to

implement certain undisclosed transactions with the Financing Parties in respect of the Debtors Aircraft and Aircraft Agreements. (Seventh Stipulation at 3.) Although the specific terms of these transactions were not described in the Seventh Stipulation, the Debtors form of order indicated that the transactions provided for the allowance of certain unsecured, non-priority prepetition claims against AMR and American Airlines. (Seventh Stipulation p. 12, at 2.) The creditors who would receive the claims and the amounts of the claims were not disclosed, and there was no description of the basis on which the transactions should be approved. The Seventh Stipulation did not mention the Prepetition Transactions entered into just before the Debtors

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bankruptcy filing with respect to the Aircraft, let alone describe the potential effects of the Seventh Stipulation on the ability of American Airlines to seek redress for those transactions. 16. On September 18, 2012, Marathon filed an objection to the Seventh Stipulation

[Docket No. 4530] (the Initial Marathon Objection) on the grounds that (a) the Seventh Stipulation did not provide adequate information about the transactions for which the Debtors were seeking approval, and (b) whatever their substance, the unspecified transactions for which the Debtors sought approval could have adverse effects upon potential fraudulent transfer claims relating to the Prepetition Transactions regarding the same Aircraft and giving rise to the same indebtedness that the Debtors appeared to be addressing in the Seventh Stipulation. 17. In response to the Marathon Objection, the Debtors, through their counsel,

represented to Marathon that they would file a motion pursuant to Fed. R. Bankr. P. 9019 and provide additional details on the substantive transactions, in order to allow Marathon and other parties in interest with notice and a meaningful opportunity to object. 18. On October 1, 2012, the Debtors filed the Eighth Stipulation and Order Approving

Ninth Section 1110(b) Extension for ERJ Aircraft [Docket No. 4872] (the Eighth Stipulation), requesting the approval of an extension of the section 1110 period with respect to the same aircraft covered by the Seventh Stipulation. 19. On October 11, 2012, Marathon filed a limited objection to the Eighth Stipulation

[Docket No. 4974] (the Second Marathon Objection). Although it appears that the Debtors essentially attempted to split the Seventh Stipulation into two parts, one part covered by the Eighth Stipulation, and the other part covered by the Rule 9019 Motion, the Eighth Stipulation still sought approval of provisions relating to the substantive transactions at issue in the Rule 9019 Motion, including a commitment by the Debtors to seek approval of those transactions and thereby to release the Financing Parties from claims relating to the Prepetition Transactions. (Rule 9019 8

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Motion, Exhibit J, Eighth Stipulation at 4.) Accordingly, out of an abundance of caution, Marathon objected to the Eight Stipulation to the extent it sought any relief beyond a mere extension of the section 1110 period or otherwise affected the potential fraudulent transfer claims in respect of the Prepetition Transactions. D. The Rule 9019 Motion 20. On October 9, 2012, in response to the Initial Marathon Objection, the Debtors filed

the Rule 9019 Motion, through which they are seeking approval of the same previously-undisclosed transactions that were the subject of the Seventh Stipulation and the Eighth Stipulation. While the Rule 9019 Motion and its attachments disclose over 300 pages of additional information relating to the transactions briefly referenced in the Seventh Stipulation, the Debtors have also filed a motion seeking to file certain information relating to the transactions under seal. See Motion for an Order Pursuant to 11 U.S.C. 107(b) and Fed. R. Bankr. P. 9018 Authorizing the filing of Certain Information Under Seal in Connection with Motion of Debtors for Order Pursuant to 11 U.S.C. 105(a), 363 and 1110 and Fed. R. Bankr. P. 9019(a) Approving Compromise and Settlement, Authorizing Entry into Term Sheets Relating to 21 ERJ135, 59 ERJ140 and 118 ERJ145 Aircraft and Granting Related Relief [Docket No. 4937]. 21. Through the Rule 9019 Motion, the Debtors seek approval of a compromise with the

Financing Parties that will effect a restructuring of American Airlines obligations to the Financing Parties with respect to the Aircraft and an extension of the section 1110 period to allow the transactions to be consummated. The restructuring itself is complex and involves the return of some aircraft, the sale and leaseback of some aircraft, and the retention of some aircraft, which, collectively, has the net result of reducing American Airlines debt obligations to the Financing Parties. Importantly, the transactions also propose:

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Granting the Financing Parties separate and distinct stipulated, allowed general unsecured non-priority pre-petition claims against the bankruptcy estates of American Airlines and AMR, each in the amount of $650 millionallegedly representing the net financial loss suffered by the Financing Parties as a result of the transactions, including deficiency claims as to the Aircraft being surrendered to the Financing Parties. (Rule 9019 Motion at 22; Exhibit B, Master Term Sheet at 19.)

Approving a broad release of the Financing Parties from liability arising under the avoidance sections of the Bankruptcy Code and similar state laws with respect to the Aircraft Agreements and the Prepetition Transactions. (Rule 9019 Motion at 15 (Release), 26.)

Notably, the Rule 9019 Motion spends just 5 paragraphs within 365 pages addressing the Prepetition Transactions. (Rule 9019 Motion at 28-32.) The Debtors conclude in those 5 paragraphs that claims relating to the Prepetition Transactions are not supported by the facts or applicable law, though they do not describe the facts in any detail and do not state what law they believe might apply. (Rule 9019 Motion at 32.) They state conclusively that the possibility that a plausibly successful avoidance claim of any nature exists is, at best, remote or, if it exists, if negligible. (emphasis added). (Id.) These strident assertions, which the Debtors attempt to support with only a handful of sentences, leave a creditor of American Airlines like Marathon in the dark. E. The Marathon Rule 9019 Objection 22. Contemporaneously with this Motion, Marathon has filed an objection to the Rule

9019 Motion (the Rule 9019 Objection). As explained more fully in the Rule 9019 Objection, Marathon has objected to the relief requested by the Debtors in the Rule 9019 Motion on the 10

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grounds that the Debtors are seeking to ratify the Prepetition Transactions in a manner that not only releases potential claims against the Financing Parties but also relinquishes the right and ability of American Airlines to investigate and seek redress among the Debtors for the Prepetition Transactions. Marathon has also objected to the lack of transparency with which the Debtors have sought approval of the transactions contemplated by the Rule 9019 Motion and the failure of the Debtors to conduct or at least allow for an independent investigation of the propriety of the Prepetition Transactions and the transactions described in the Rule 9019 Motion before seeking to approve those transactions. JURISDICTION 23. This Court has subject matter jurisdiction to consider this matter pursuant to 28

U.S.C. 157, 1334, and 1408. This is a core proceeding pursuant to 28 U.S.C. 157(b)(2). RELIEF REQUESTED 24. Marathon respectfully requests appointment of an examiner to investigate, as more

fully set forth in the proposed order attached hereto as Exhibit A, the Prepetition Transactions and any claims the Debtors may hold in respect of the Prepetition Transactions. BASIS FOR THE RELIEF REQUESTED A. Section 1104(c)(2) Mandates Appointment of an Examiner. 25. Section 1104(c)(2) of the Bankruptcy Code provides that [i]f the court does not order the appointment of a trustee . . . then at any time before the confirmation of a plan, on request of a party in interest, . . . and after notice and a hearing, the court shall order the appointment of an examiner to conduct such an investigation of the debtor as is appropriate . . . if the debtors fixed, liquidated, unsecured debts, other than debts for goods, services, or taxes, or owing to an insider, exceed $5,000,000. 11 U.S.C. 1104(c).

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26.

As the U.S. Court of Appeals for the Sixth Circuit has recognized, section 1104(c)(2)

of the Bankruptcy Code plainly means that the bankruptcy court shall order the appointment of an examiner when the total fixed, liquidated, unsecured debt exceeds $5 million, if [a party in interest] requests one. Morgenstern v. Recvo D.S., Inc. (In re Revco D.S., Inc.), 898 F.2d 498, 50001 (6th Cir. 1990) (concluding that appointment of an examiner is mandatory under the statutes plain meaning). Similarly, the U.S. District Court for the Southern District of New York has found that on its face, Section 1104(c)(2) mandates the appointment of an examiner where a party in interest moves for an examiner and the debtor has $5,000,000 in qualifying debt. Loral Stockholders Protective Comm. v. Loral Space & Commcns Ltd. (In re Loral Space & Commcns Ltd.), No. 04-Civ-8645, 2004 WL 2979785, at *4 (S.D.N.Y. Dec. 23, 2004); see also Walton v. Cornerstone Ministries Invs., Inc., 398 B.R. 77, 81-82 (N.D. Ga. 2008) ([E]very district court and nearly every bankruptcy court that has confronted the question has also read the provision to be mandatory on its face.) (citing cases); but see In re Residential Capital, LLC, 474 B.R. 112, 120-21 (Bankr. S.D.N.Y. 2012) (concluding that a court may decline to appoint an examiner if such appointment would be inappropriate, but nevertheless appointing an examiner under the facts of the case).5 27. The elements of section 1104(c)(2) are easily satisfied in the Debtors cases. The

Court has not appointed a trustee, no plan has been filed, and the Debtors unquestionably have more than $5 million of qualifying debt. Accordingly, section 1104(c)(2) mandates the appointment of an

While Marathon maintains that the appointment of an examiner is mandatory under the plain language of section 1104(c)(2) of the Bankruptcy Code, it is also appropriate under Judge Glenns interpretation of the statute in his recent decision in the ResCap case. Judge Glenn indicated that the appointment of an examiner might be inappropriate if the motion was filed for an improper purpose such as a litigation tactic to delay a case, or if there is no factual basis to conclude that an investigation needs to be conducted, or if an appropriate and thorough investigation has already been conducted (or is nearly complete) by a creditors committee or a governmental agency. In re Residential Capital, LLC, 474 B.R. at 121. As discussed in more detail below, the appointment of an examiner is in the best interests of creditors of American Airlines estate. For those same reasons, and due to the absence of any of the factors identified by Judge Glenn, appointment of an examiner is appropriate in these cases. Indeed, in In re Residential Capital, when faced with a request for an investigation similar to the one requested in this Motion, Judge Glenn determined that appointment of an examiner was appropriate to investigate prepetition transfers, claims arising therefrom, and potential waivers of such claims by the Debtors.

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examiner to conduct an appropriate investigation of the Prepetition Transactions, any claims or rights in respect of the Prepetition Transactions, and the potential effect of the Rule 9019 Motion on any such claims or other rights. B. The Investigation is Necessary, Appropriate, and in the Interests of Creditors Under Section 1104(c)(1). 28. Section 1104(c)(1) of the Bankruptcy Code provides that a court shall appoint an

examiner where such an appointment is in the interests of creditors or other stakeholders. 11 U.S.C. 1104(c)(1). That standard is met here. 29. A thorough and independent investigation is needed into the billions of dollars of

Prepetition Transactions between American Airlines and American Eagle. The case law makes clear that appointing an examiner is warranted under these circumstances. See, e.g., In re Keene Corp., 164 B.R. at 856 (appointing an examiner to review transfers from the debtor to affiliates) (citing M. Bienenstock, Bankruptcy Reorganization 299 (1987) (Often, appointment of an examiner is warranted when the debtors transactions with affiliates should be investigated.)); In re Gilman Servs., Inc., 46 B.R. 322, 327-28 (Bankr. D. Mass 1985) (A debtors sale of assets to a related corporation before the commencement of the bankruptcy case warrants an investigation by an examiner where there are unanswered questions concerning the transaction and interrelationship of the parties involved.). An examiner should be appointed to investigate the propriety of the Prepetition Transactions and to determine whether they give rise to any causes of action of American Airlines. 30. An investigation is also appropriate because the Debtors propose to release claims

against the Financing Parties in respect of the Prepetition Transactions, particularly where such a release could have the unnecessary consequence of preventing American Airlines from seeking redress for the incurrence of billions of dollars of debt as a result of the Prepetition Transactions.

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31.

To be clear, it is possible that the Prepetition Transactions did in fact involve an

even exchange among American Airlines and American Eagle. At this time, the Debtors have not provided, and Marathon does not have, information that would definitively support or contradict that conclusion. But before American Airlines irrevocably releases any potential claims in respect of the Prepetition Transactions, and before creditors like Marathon can fully evaluate these matters in connection with the Debtors request for approval of the Rule 9019 Motion, there is a need for a thorough, independent, and public investigation into the Prepetition Transactions, any rights and potential claims of the Debtors in respect thereof, and the potential effects of the transactions described in the Rule 9019 Motion on the Debtors ability to exercise such rights and assert such claims. C. An Examiner is Uniquely Qualified to Conduct the Requested Investigation. 32. The Debtors assert that they have extensively investigated the Prepetition

Transactions. (Rule 9019 Motion at 27.) Nevertheless, in contrast to the Debtors substantial efforts articulating the benefit of the transaction described in the Rule 9019 Motion for the Debtors collective estates, they spend only 5 paragraphs of their Rule 9019 Motion attempting to explain and defend the economics of the transactions described in the Rule 9019 Motion and the Prepetition Transactions for American Airlines. Even if the Debtors were to outline the specific steps they took in their apparently extensive investigation to the satisfaction of the Court, that investigation would still be defective unless an independent party has evaluated the Prepetition Transactions from the perspective of American Airlines. 33. It is by no means unusual that affiliated debtors in jointly administered cases would

have difficulty independently considering the interests of each estate and its constituents. And Marathon does nor cast blame on the Debtors for being in such a position. But in no event should the Prepetition Transactions, and in particular the incurrence of billions of dollars in debt by 14

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American Airlines just before its bankruptcy, be quickly and irresponsibly sanctioned and insulated from further review as a consequence of the approval of the debt restructuring contemplated by the Rule 9019 Motion, based solely on an investigation by the Debtors collectively. Instead, an opportunity must be afforded for a thorough and independent investigation by an examiner. 34. Appointing an examiner makes particular sense here because it is critical that the

investigation be conducted by someone viewed as impartial by all parties in interest. An examiner answers solely to the Court and acts as an objective nonadversarial party who will review the pertinent transactions and documents, thereby allowing the parties to make an informed determination as to their substantive rights. In re FiberMark, 339 B.R. 321, 325 (Bankr. D. Vt. 2006); see also In re Gitto Global Corp., No. Civ. 05-10334, 2005 WL 1027348, at *2 (D. Mass. 2005) (An examiner is first and foremost disinterested and nonadversarial.). Accordingly, an examiner is uniquely qualified to carry out a thorough, independent, and objective investigation in the Debtors cases. 35. By contrast, the Debtors are not in a position to conduct an independent review of

these issues. First, the Debtors are operated today by the same management that consummated the Prepetition Transactions. Obviously, that management must have determined just prior to the bankruptcy filing that the Prepetition Transactions were in the collective best interests of the Debtors estates, and were important to the American Eagle spin-off strategy that the Debtors management was pursuing. However, that collective pre-bankruptcy determination is not the same as an independent determination in the context of a bankruptcy case. The former is geared toward the overall business strategy of a consolidated enterprise; the latter is geared towards a fair distribution of available value to creditors of individual entities. It is just not possible for the Debtors management to undertake today an objective and critical review of the same Prepetition Transactions that they previously approved. 15

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36.

Second, the issues surrounding the Prepetition Transactions are not issues that all of

the Debtors can properly consider collectively. The Prepetition Transactions involve billions of dollars in value that shifted among the Debtors. As a result of these shifts, American Eagle and AMR may have been winners of hundreds of millions of dollars, at the expense of American Airlines being a loser of hundreds of millions of dollars. It is unfair to expect that the Debtors could collectively conduct a proper investigation of the Prepetition Transactions with a focus on the individual interests of the American Airlines estate. Indeed, it is wholly possible that the Prepetition Transactions may have been a net positive for all of the Debtors collectively, and that at the same time they were a huge net negative for American Airlines individually. Where it is primarily American Airlines that would waive rights if the Rule 9019 Motion were approved, it only makes sense that an examination of the rights to be waived would be conducted from the perspective of American Airlines individually. The results of any such collective investigation by the Debtors (or any collective estate representatives) cannot be properly relied upon by American Airlines creditors to protect their interests. 37. Third, the Prepetition Transactions have become an issue in these chapter 11 cases

now because the Debtors have sought the approval of debt-restructuring transactions that would reduce or eliminate the ability of American Airlines to seek redress if, in fact, any portion of the Prepetition Transactions proved to be avoidable or otherwise cancellable or reversible. The Debtors first sought approval for these debt-restructuring transactions through a routine section 1110 stipulation that failed to disclose the nature and extent of the debt-restructuring transactions or their potential effects on claims related to the Prepetition Transactions. While the Debtors have corrected this error of process by re-proposing the same debt-restructuring transactions through the Rule 9019 Motion, the Debtors prior conduct casts a shadow on the credibility of the Debtors apparent determination that the Prepetition Transactions are immune from challenge. If the Debtors cannot 16

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be trusted to present issues affecting the Prepetition Transactions for approval in a transparent manner, how can they be trusted to provide the conclusive determination that claims in respect of the Prepetition Transactions should be irrevocably relinquished? D. The Proposed Scope of the Examiners Investigation is Appropriate 38. The proposed scope of the examiners investigation as set forth in the proposed order

attached as Exhibit A is tailored to serve a specific purpose and is well within an examiners statutory authority under section 1106(b) of the Bankruptcy Code, and consistent with orders appointing examiners in analogous cases, including cases in this district. See, e.g., In re DBSI, Inc., Case No. 08-12687 (PJW) (Bankr. D. Del. Mar. 25, 2009) [Docket No. 2974] (The Examiner is directed to: (a) investigate the circumstances surrounding (i) any and all of the Debtors intercompany transactions and transfers . . .); In re Washington Mutual, Inc., Case No. 08-12229 (MFW) (Bankr. D. Del. July 22, 2010) [Docket No. 5120] (The Examiner is directed to investigate . . . (a) the claims and assets that may be property of the Debtors estates that are proposed to be conveyed, released or otherwise compromised and settled under the Plan and Settlement Agreement. . .); In re Dynegy Holdings, LLC, Case No. 11-38111 (CGM) (Bankr. S.D.N.Y. Dec. 29, 2011) [Docket No. 276] (providing that the examiner shall conduct an unfettered investigation of the Debtors . . . with respect to (i) the conduct of the Debtors and their non-Debtor affiliates in connection with the prepetition 2011 restructuring and reorganization of the Debtors and their nonDebtor affiliates; (ii) any possible fraudulent conveyances . . .); In re Residential Capital, LLC, Case No. 12-12020 (MG) (Bankr. S.D.N.Y. June 20, 2012) [Docket No. 454] (ordering appointment of an examiner to investigate and report on, among other things, the Debtors prepetition transactions with a non-debtor and any claims that the Debtors may hold related to such transactions, and any claims that the Debtors propose to release as part of their plan).

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39.

Marathon has also, contemporaneously with this Motion, served discovery requests

on the Debtors covering many of the same issues as the examiner would investigate. If an examiner were appointed by the Court, Marathon would withdraw those requests and defer to the investigation of the examiner. However, if an examiner is not appointed, Marathon intends to obtain that discovery so that it may on its own determine whether and to what extent the Prepetition Transactions should be challenged (or, if needed, to establish a further record for the Court of why the appointment of an examiner is required and appropriate). Similarly, Marathons request for an examiner is based on the assumption that the Debtors desire to have the transactions described in the Rule 9019 Motion approved in the short term. To the extent that the Debtors were inclined to adjourn the Rule 9019 Motion to a later date, Marathon would also adjourn its request for the appointment of an examiner. The critical point is that an independent examination should occur prior to any approval of the Rule 9019 Motion. MEMORANDUM OF LAW 40. Marathon respectfully submits that the discussion of the relevant issues of law set

forth above satisfies the requirements of Local Rule 9013-1(b) and that no separate memorandum of law in support of the Motion is required. NOTICE AND NO PRIOR REQUEST 41. Notice of this Motion has been provided to parties in interest in accordance with the

Amended Order Pursuant to 11 U.S.C. 105(a) and (d) and Bankruptcy Rules 1015(c), 2002(m), and 9007 Implementing Certain Notice and Case Management Procedures, dated August 8, 2012 [Docket No. 3952]. In view of the facts and circumstances, such notice is sufficient and no other or further notice need be provided. 42. court. 18 No previous motion for the relief requested herein has been made to this or any other

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WHEREFORE, Marathon respectfully request that the Court enter an order, substantially in the form attached as Exhibit A, (a) approving and directing the appointment of an independent examiner for the purposes of investigating and reporting to the Court and parties in interest with respect to the matters described above and (b) granting the relief requested herein and such other and further relief as may be just and proper.

Dated: New York, New York October 23, 2012

WILMER CUTLER PICKERING HALE AND DORR LLP

/s/ George W. Shuster, Jr. Philip D. Anker George W. Shuster, Jr. 7 World Trade Center New York, New York 10007 Telephone: 212.937.7232 Facsimile: 212.230.8888 Attorneys for Marathon Asset Management, LP

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EXHIBIT A

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UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK -----------------------------------------------------------------x In re : : AMR CORPORATION, et al., : : Debtors. : : -----------------------------------------------------------------x

Chapter 11 Case No. 11-15463 (SHL) (Jointly Administered)

[PROPOSED] ORDER DIRECTING THE APPOINTMENT OF AN EXAMINER PURSUANT TO 11 U.S.C. 1104 (c) RELATED TO THE MOTION OF DEBTORS FOR ORDER PURSUANT TO 11 U.S.C. 105(a), 363 AND 1110 AND FED. R. BANKR. P. 9019(a) APPROVING COMPROMISE AND SETTLEMENT, AUTHORIZING ENTRY INTO TERM SHEETS RELATING TO 21 ERJ135, 59 ERJ140, AND 118 ERJ145 AIRCRAFT AND GRANTING RELATED RELIEF, AND TRANSACTIONS DESCRIBED THEREIN Upon the motion, dated October 23, 2012 (the Motion),1 of Marathon Asset Management, LP, on behalf of one or more managed funds and/or accounts, for appointment of an examiner pursuant to 11 U.S.C. 1104(c), as more fully described in the Motion; and the Court having jurisdiction to consider the Motion and the relief requested therein in accordance with 28 U.S.C. 157 and 1334 and the Amended Standing Order of Reference M-431, dated January 31, 2012 (Preska, C.J.); and consideration of the Motion and the relief requested therein being a core proceeding pursuant to 28 U.S.C. 157(b); and venue being proper before this Court pursuant to 28 U.S.C. 1408 and 1409; and due and proper notice of the Motion having been provided, and it appearing that no other or further notice need be provided; and a hearing having been held to consider the relief requested in the Motion; and the Court having found and determined that the relief sought in the Motion is in the best interests of the Debtors, their estates and creditors, and all parties in interest and that the legal and factual bases set forth in the Motion

Unless otherwise defined herein, capitalized terms used herein shall have the meanings ascribed thereto in the Motion.

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establish just cause for the relief granted herein; and after due deliberation and sufficient cause appearing therefore, it is ORDERED that the Motion is granted in all respects; and it is further ORDERED that pursuant to section 1104(c) of the Bankruptcy Code, the United States Trustee shall appoint an examiner (the Examiner) in these jointly administered cases pursuant to the terms hereof; and it is further ORDERED, that the Examiner shall conduct an investigation into (1) the Prepetition Transactions, (2) any claims or other rights that the Debtors may hold in respect of the Prepetition Transactions, and (3) the potential effects on any such claims or rights of the proposed transactions described in the Debtors Motion of Debtors for Order Pursuant to 11 U.S.C. 105(a), 363, and 1110 and Fed. R. Bankr. P. 9019(a) Approving Compromise and Settlement, Authorizing Entry into Term Sheets Relating to 21 ERJ135, 59 ERJ140, and 118 ERJ145 Aircraft and Granting Related Relief [Docket No. 4936] (collectively, the Investigation); and it is further ORDERED, that the Examiner may retain attorneys and/or other professionals if he or she determines that such professionals are necessary to discharge his or her duties, with such retention to be subject to Court approval under standards equivalent to those set forth in section 327 of the Bankruptcy Code; and it is further ORDERED, that, subject to any budget that may be established by the Court, the Examiner and any professionals retained by the Examiner pursuant to any order of this Court shall be compensated and reimbursed for their expenses pursuant to any procedures for interim compensation and reimbursement of professional fees that are established in the Debtors chapter 11 cases, with compensation and reimbursement of the Examiner being determined pursuant to

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section 330 of the Bankruptcy Code, and compensation and reimbursement of the Examiners professionals being determined pursuant to standards equivalent to those set forth in section 330 of the Bankruptcy Code; and it is further ORDERED, that the precise scope, timing, and budget for the Examiners Investigation will be set by the Court after the Examiner is appointed and confers with the Debtors, the Committee, Marathon, and other parties in interest; and it is further ORDERED, that this Order is without prejudice to (i) the rights of the Debtors, the Committee, Marathon, any other party in interest, or the Examiner, to seek relief from the Court, including, but not limited to, clarifying and expanding or limiting the scope of the Investigation; and (ii) the right of the Examiner to seek such other relief as he or she may deem appropriate in furtherance of the discharge of his or her duties and the Investigation; and it is further ORDERED, that the Debtors, the Committee, and all other parties in interest shall cooperate and (i) cause their respective present directors, officers, employees and professions, and (ii) utilize reasonable best efforts to cause their respective former directors, officers, employees and professionals to cooperate with the Examiner in conjunction with the performance of any of the Examiners duties and the Investigation; and it is further ORDERED, that the Examiner shall have the standing of a party in interest with respect to the matters that are within the scope of the Investigation and shall be entitled to appear and be heard at any and all hearings in these cases; and it is further ORDERED, that nothing in this Order shall affect the right of the United States Trustee or any other party to request any other lawful relief, including, but not limited to, the appointment of a trustee; and it is further

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ORDERED, that the Court will conduct a case management conference with the Examiner, the Debtors, the Committee, Marathon, and all parties in interest to consider the precise scope, time and budget for the Investigation; and it is further ORDERED, that the Court shall retain jurisdiction with respect to all matters arising from or related to the implementation of this Order.

Dated: New York, New York , 2012 _______________________ United States Bankruptcy Judge