Eastern’s Sale Is an On-Again, Off-Again Deal : A Press Conference to Announce Accord With Ueberroth Is Scrapped

Just 15 minutes before the sale of Eastern Airlines to former baseball commissioner Peter V. Ueberroth was supposed to be announced at a New York hotel Wednesday night, Eastern’s parent company abruptly canceled the news conference.

The sudden turn of events climaxed another topsy-turvy day in the increasingly Byzantine, chaotic process that might lead to a sale of the financially ailing carrier, which has been paralyzed by a machinists strike since March 4.

J. Thomas Talbot, a Newport Beach real estate executive who is one of Ueberroth’s partners in the deal, said he was mystified about the press conference snafu. “We never agreed to a press conference,” Talbot said in an interview. “We don’t know where that came from,” he added.

Another source close to Ueberroth said negotiations broke off Wednesday evening in New York and would resume today. “We most definitely are not talking about an announcement (Wednesday) night,” the source said. “There is more work to do.”

The source said Ueberroth and Frank Lorenzo, chairman of Eastern’s parent firm, the Texas Air holding company, began what was expected to be a brief, final negotiating session Wednesday morning. However, the source said, Lorenzo repeatedly insisted on changes in the proposed agreement. Texas Air officials have declined to comment on the talks.

More Confusion

A union lawyer who has had considerable dealings with Lorenzo said he was not surprised by the day’s developments: “Frank’s approach to negotiations is, when you make a deal, that’s the start of negotiations.”

The bizarre nature of the day’s events was perhaps best illustrated by the fact that some journalists were told that the news conference would be held at the Ritz Carlton Hotel, while others were told that it would be held at the Rainbow Room in Rockefeller Center.

Moreover, John Scanlon, a controversial New York public relations impresario, called the ABC television network Wednesday shortly before its “World News Tonight” program went on the air to ballyhoo the press conference, sources said. Shortly thereafter, anchorman Peter Jennings announced on the air that Ueberroth had reached agreement to buy Eastern for $460 million.

Ueberroth was sufficiently confident Wednesday that the sale would be consummated during the day that he called the president of Eastern’s flight attendants union in Miami to give her the news. “We didn’t discuss any particulars, just the fact that he was notifying me there would be a potential sale of the airline (to his group), possibly today,” Mary Jane Barry, president of Transport Workers Union local 553, said at a rally in Miami.

A Ueberroth associate had said Wednesday morning that a three-page press release announcing the sale had been prepared. But snags arose, and they were not ironed out by the end of the day. One of those sources remained hopeful that the deal would still be concluded. “Peter Ueberroth is not walking away,” he said.

Another source close to Ueberroth said Wednesday’s events brought to mind the well-worn adage of former New York Yankees catcher Yogi Berra: “It ain’t over till it’s over.”

Well-placed sources said the Ueberroth group, aided by the investment banking firm of Ardshield Inc. in New York, has proposed a package worth $450 million to $500 million. Eastern would retain a minority interest in Texas Air’s computer system and it would forgive millions of dollars of debt owed to it by the parent company.

Under the deal, Eastern’s new owners would receive the proceeds of the sale of the carrier’s Northeastern shuttle. Last Friday, New York real estate tycoon Donald J. Trump agreed to buy the shuttle for $365 million. That sale, as well as the Ueberroth deal to buy Eastern, has to be approved by U.S. Bankruptcy Judge Burton R. Lif-land.

Additionally, Eastern’s employees would receive a 30% ownership share in the carrier. But Eastern’s three unions would have to make about $210 million in concessions yearly for the next several years.

Has Happened Before

Earlier in the day, at a hearing in federal bankruptcy court, Bruce Zirinsky, a lawyer for Eastern, said negotiations on a sale of the airline were continuing and that he hoped they would be concluded “in a matter of days . . . if not sooner.”

And David Boies, a prominent New York attorney who is a special counsel to Texas Air, said in an interview: “I’ve seen deals fall apart in the last half hour.” He then added, “I’ve seen them come together again.”

Last Thursday, Ueberroth offered $464 million for Eastern, but was told by Texas Air officials that Chicago hotel magnate Jay A. Pritzker had made a higher bid. When Texas Air officials made no headway with Pritzker, talks with Ueberroth resumed.

In another key development Wednesday, federal bankruptcy trustee Harry Jones appointed David I. Shapiro, a prominent Washington attorney, as the special court examiner whose mission is to help bring a swift end to the Eastern strike. His mandate also includes facilitating an agreement between the airline and its creditors in bankruptcy court.

Eastern sought protection from creditors March 9 under Chapter 11 of the U.S. Bankruptcy Code after five days of mounting losses caused by the strike.

Jones made the appointment on orders of Lifland, the bankruptcy judge. At a hearing earlier in the day, Lifland urged Eastern, its unions and its creditors to come together.

“I want the planes flying,” the judge said. “This grounded airline is a national asset.”

An examiner was needed, he said, because, “to date, I don’t have a head banger. I don’t have a facilitator.”

By most accounts, he got the right man in Shapiro, 60. A veteran Washington attorney who started as a labor lawyer in New York in the 1950s, Shapiro is a partner in Dickstein, Shapiro & Morin, a large Washington firm.

During his long career, Shapiro has handled many thorny matters, including serving as a special master assisting U.S. District Judge Jack Weinstein in Brooklyn, who presided over the lengthy, complex case involving thousands of Vietnam veterans who were injured by the pesticide Agent Orange.

“The judge who appointed him has made a great choice,” said Stephen J. Schlegel, a Chicago lawyer for plaintiffs in the Agent Orange case. “He is bright, street smart . . . and is as straight a shooter as one will ever meet.”

In another development, representatives of Eastern unions said they would picket American Express travel offices because they had obtained a confidential memo urging officials to give preference to non-union Continental Airlines, which is also owned by Texas Air, when booking flights.

Robert E. Dallos reported from New York and Henry Weinstein from Los Angeles.