British Airways Agrees to Settle Laker Lawsuit

An out-of-court settlement estimated to be worth $48 million has been reached in the antitrust lawsuit filed by the now-defunct Laker Airways against British Airways and 11 other defendants, attorneys involved in the negotiations told a federal judge today.

The estimated $48 million to be paid to Laker’s creditors does not include offers of $8 million to Sir Freddie Laker, owner of the bankrupt airline, and $8 million to two law firms for attorneys’ fees. Those offers have not yet been accepted.

Sidney S. Rosdeitcher, attorney for British Airways and the other defendants, told U.S. District Judge Harold H. Greene that despite unresolved matters, the agreement would go forward in any case.

Not Yet Accepted

He said that Laker, a major shareholder in the now-bankrupt airline, was offered $8 million “in return for an acceptable release of all claims.” “If Sir Freddie declines to accept the $8 million, the settlement will nonetheless proceed,” the agreement says.

The agreement also calls for an offer of $50,000 to Joan Laker, Sir Freddie’s wife, for her 500,000 shares in the airline. She has not yet accepted.

The 12 defendants have offered two law firms, Beckman & Kirstein and Metzger and Shadyac & Schwarz, $8 million for attorneys’ fees. That offer remains open, Rosdeitcher said.

He asked the judge to assist in resolving the issue of attorneys’ fees.

Terms of the agreement include:

- Creditors whose claims are under 50,000 pounds will be paid the full amount of their debt. These creditors are principally ticket claimants and ex-employees.

- Creditors whose claims exceed 50,000 pounds, except for the larger ones, will be paid 50,000 pounds plus 20% of their claim. Only two of the approximately 45 creditors in this category have not yet accepted the offer, Rosdeitcher told the court. Eighty percent of the creditors have already been paid.

- The larger creditors, which include all major financing and manufacturing creditors such as Ex-Im Bank, the syndicate of banks headed by Midland Bank, Clydesdale Bank, Mitsui, Royal Bank of Canada, General Electric and Airbus Industrie, have agreed to accept $250,000 for an assignment of their claims with an acknowledgment that the U.S. antitrust suit may be discontinued. There also will be a payment of any interest due as of Feb. 5, 1982.

The pound currently is worth a little less than $1.40.