TWA Seeks U.S. Probe of Icahn Group : Asks Transportation Department to Bar Management Changes
In yet another attempt to ward off a threatened takeover attempt by Carl C. Icahn, Trans World Airlines on Thursday petitioned the Department of Transportation to investigate its own “continuing fitness . . . to operate air transport services” should the corporate raider succeed with his intentions.
A group headed by the New York-based entrepreneur has bought 23% of TWA stock in the last several months for $109.2 million. But TWA, maintaining that “Icahn and his associates have no experience operating an airline and have no managerial competence or experience in operating an ongoing enterprise,” said it commenced its “emergency” proceeding “so that DOT may investigate Icahn and his interest in TWA and act to ensure that the company not become unfit to hold certificates of public convenience and necessity.”
Icahn could not be reached for comment on the latest action.
The airline also sued Icahn and his associates in the Circuit Court of St. Louis on Thursday, alleging violations of Missouri law, including fraud, conspiracy and breach of fiduciary duties.
In the suit, the airline charged that the defendants falsely said they had not decided whether to seek control of TWA when, in fact, they had resolved not only to control TWA but also to cause it to restructure its operations and drop some of the routes and cities that it serves. The group, alleged the airline, also planned to borrow heavily on TWA’s assets, jeopardizing its soundness and forcing it to lay off many employees.
In its actions against Icahn, including a federal suit filed Wednesday in New York, TWA has charged that he plans to liquidate assets and abandon operations to provide funds for his “speculative investments.”
In its filing with the Department of Transportation, TWA also sought to prevent Icahn from using his equity position to change TWA’s management, financial or operating structure or make changes “that would render TWA unfit to perform the air service contemplated by its certificates.”
The airline also sought to have DOT prevent Icahn from acquiring any additional stock and order him to divest himself of the shares that he owns.
A spokesman at the Department of Transportation said the final decision on such a case would be made by Matthew V. Scocozza, assistant secretary for policy and international affairs. If the case is handled on an emergency basis, anyone supporting or opposing the petition must respond by June 13. If not, the department will hold hearings according to its own timetable.
