Airlines : EASTERN: No Details on Bid : Ex-Piedmont Chief Leads Bid for Eastern

Times Staff Writer

Late Wednesday, shortly before a court deadline for submitting bids to purchase strikebound and bankrupt Eastern Airlines, a group headed by former Piedmont Airlines Chairman William R. Howard said it had made an offer but would not disclose any of the financial details.

A spokeswoman for Prudential-Bache Securities Inc., a major potential investor in Howard's endeavor, said the proposal had been filed with Eastern and a copy had been sent to the court-appointed examiner who is overseeing the Eastern bankruptcy case.

The examiner, David I. Shapiro, a Washington lawyer, ordered that the details not be disclosed for two days, the spokeswoman said.

No other formal bids for Eastern as a whole were received by the Wednesday deadline, but at least one more is expected. Joseph Ritchie, a Chicago commodities futures trader, was given a two-day extension by the court because confidential information on Eastern was mistakenly sent to another person with the same name.

Judge Burton R. Lifland, the bankruptcy judge, imposed Wednesday's deadline last week and told Shapiro to report to him May 17 on any bids and on other alternatives for Eastern. These apparently include liquidation as well as the plan by Eastern's owner, the Texas Air holding company, to reorganize the airline into a smaller entity. Eastern said it wants to sell $1.8 billion worth of assets.

Eastern's machinists union went on strike March 4, and the picket lines have been observed by the airline's pilots and flight attendants, virtually halting its operations. Eastern filed for protection March 9 from its creditors under Chapter 11 of the federal bankruptcy laws.

In another development Wednesday, USAir Inc. offered $525 million for certain assets of Eastern, including 15 Boeing 757 airliners and related equipment, ground facilities, airport slots and three international routes.

USAir, based in Arlington, Va., owns the USAir airline as well as Piedmont Airlines.

Also, Phoenix-based America West Airlines said Wednesday that it had raised its offer for the Eastern Shuttle and 10 of Eastern's 757s to $751 million from $726 million. Of the total, $415 million would be for the shuttle and the rest for the 10 planes.

Eastern has agreed to sell the shuttle, which operates between New York and Boston and Washington, to financier Donald J. Trump for $365 million. However, all decisions on the sale of Eastern assets must now be approved by Judge Lifland.

The judge has set a hearing here Monday on the disposition of the shuttle.

There were reports that the Howard group planned to offer to pay creditors 25 cents on the dollar with the remainder in stock. Eastern has vowed that creditors would receive $1 for every dollar owed.

A union source said late Wednesday that there were indications that yet another bid for Eastern might still emerge that would "have the sponsorship of Eastern's management."

Texas Air Chairman Frank "Lorenzo is definitely up to something," the source said. "Lorenzo's plan may have the sale of Eastern in it. . . . "

The source added, "Lorenzo is playing a waiting game, and it's having its effect on the creditors' committee, creating the impression that this is an incredible morass." And that, the source said, could make the the committee "more receptive to Eastern's announced plan to downsize the airline."

Times staff writer Henry Weinstein in Los Angeles contributed to this story.

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