Exclusive: American Airlines' $30 million London town house

Wed Dec 14, 2011 3:56pm EST
 
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By Rhys Jones and Chris Wickham

LONDON (Reuters) - Buried deep in American Airlines' Chapter 11 bankruptcy filing is a striking asset -- a town house in one of London's most expensive residential streets that property experts say could be worth up to $30 million.

The five-bedroom house in London's high-end Kensington district is a throwback to the airline's expansion two decades ago and stands a 10 minute walk from the former home of Princess Diana, with gentry and diplomats as neighbors.

UK regulatory filings show the house has been used as a residence for senior executives, including the current chairman and chief executive Thomas Horton, since the airline bought it in the early 1990s.

Listed as "London Residence LON6526," the five-floor house is one of eight owned properties declared by parent company AMR Corp AMR.N when it asked for protection from creditors on November 30, sagging under $30 billion of liabilities.

The plush residence in Cottesmore Gardens -- recently named Britain's 10th most expensive address by property firm Zoopla --

could become a thorn in the airline's side as it fights its way through bankruptcy. Corporate restructuring usually involves sacrifices by staff, retirees and creditors.

Robert Mann, an airline consultant with RW Mann & Co, who is a former fleet planning executive at AMR, said the ownership of the house is far from the biggest problem the airline is facing but added it would raise eyebrows and should probably be sold.

"As part of an overall debt-clearing exercise, yes it probably should be sold and leased back if they really want to stay there. If you can realize 17 million bucks, you ought to do it."   Continued...