DALLAS (AP) – A federal official opposes a nearly $20 million severance payment to the CEO of the parent of American Airlines in the proposed merger with US Airways.

The U.S. trustee says Fort Worth-based American and AMR Corp. failed to explain how severance and retention payments for management employees are allowed under a 2005 change in the bankruptcy laws.

Tracy Hope Davis with the Justice Department lodged her objections Friday.

AMR spokesman Andrew Backover says greements in the merger reasonably and appropriately compensate employees and are in line with industry precedents.

A bankruptcy judge has scheduled a March 27 hearing to consider the merger proposal. The combined company would keep the American name but be run by US Airways CEO Doug Parker.

(© Copyright 2013 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)

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