Delta Rejects Blame for Pan Am's Death : Airlines: Accused of purposely letting the ailing carrier die, it says Pan Am's creditors are the real villains.

From Associated Press

As United Airlines prepared to assume the abandoned Latin American routes of Pan Am, Delta Air Lines sought Tuesday to contain the damage from charges that it wrongfully pulled the plug on the terminally ill carrier.

"We're not the villain," said Robert S. Harkey, Delta's senior vice president and general counsel.

Delta has said Pan Am was just too sick to save, so it decided last week not to pump more money into it. Pan Am was dead within hours.

In a session with reporters, Delta tried to shift the blame for Pan Am's death to Pan Am's creditors.

"The creditors committee and their professionals have repeatedly engaged in disruptive and manipulative acts which themselves contributed to the failure of Pan Am to emerge from bankruptcy," Delta said.

Delta cited a letter written by the creditors' lawyer, Leon Marcus, that was leaked to The Miami Herald. The letter said Delta was trying to sabotage the reorganization of Pan Am by loaning the carrier money at unfair rates. Pan Am bookings quickly plunged, Delta said.

Creditors have filed a $2.5-billion lawsuit contending that Delta bargained in bad faith when it promised to help Pan Am reorganize. They maintain that Delta's real motive was to buy most of the bankrupt airline's routes across the Atlantic and its Northeast shuttle.

Delta got all those assets by early November. On Dec. 3, the day Pan Am's bankruptcy judge was to approve a reorganization plan, lawyers said in court that Delta would not provide the money to keep Pan Am alive.

Delta said Tuesday that the creditors' lawsuit was "utterly without merit" and it promised a vigorous defense.

Delta said it was not concerned about losing the legal battle. But the Atlanta-based carrier is worried about other fallout from its handling of the Pan Am case.

Shortly after Delta said it would not give Pan Am more money, then-Transportation Secretary Samuel K. Skinner publicly criticized Delta's tactics.

Delta disclosed Tuesday that it immediately wrote to Skinner and other politicians in Washington to defend its actions.

When Delta officials were asked why they were taking such great steps to explain themselves, they said they wanted the public to get their side of the story, which they believe was distorted by Pan Am creditors.

"We're afraid of just a general poisoning of the public information about this," Harkey said.

As the best of Pan Am's remaining assets were auctioned Monday in U.S. Bankruptcy Court, Pan Am employees who lost their jobs heckled Delta's attorney. They wore signs reading, "Delta killed Pan Am."

United, the nation's second-largest airline, came away the big winner. Its bid of $135 million for most of Pan Am's Latin American routes outdid American Airlines, the biggest U.S. carrier, by $5 million.

United's acquisition, assuming government approval, puts it in position to compete head-to-head with American in major South and Central American markets.

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