Top Burlington Air Express Executives Forced Out : Shake-up: The parent corporation accuses the pair of pursuing an unauthorized management-led buyout of the shipping company.

The top executives of Burlington Air Express, one of the nation’s largest international air express companies, said Monday that they were asked to resign after talks on a management buyout of the company fell through.

Co-chief executives Robert I. MacFarlane, 47, an Irish national, and Peter Thorrington, 46, a British national, said they learned Friday that their contracts with the company will not be renewed.

In the past few months, MacFarlane and Thorrington said Monday, parent Pittston Co. in Greenwich, Conn., indicated to Burlington’s management that it was planning to restructure its various interests, which range from bituminous coal to home security businesses. Among possibilities mentioned were spinning off Burlington as a separate public company through an initial public stock offering or selling it to a competitor.

While there were a number of suitors, they included no serious contenders to acquire Burlington, which had 1991 revenue of $876 million and profit of $19.8 million, MacFarlane said.

“We felt that the best remaining option was a management-led buyout,” he said.

MacFarlane and Thorrington headed a group of top Burlington executives who discussed with Pittston the possibility of a buyout. Also on the team were Gene Ochi, Burlington’s senior vice president of marketing; Brent Stanley, senior executive of human resources; and Cameron Whiteman, senior vice president of information services. Ochi, Stanley and Whiteman also were asked to resign, MacFarlane said.

MacFarlane and Thorrington said they had approached the investment bank Morgan Stanley Group Inc. about structuring a proposal and were prepared to offer between $150 million and $200 million to Pittston to acquire Burlington.

Friday’s request for their resignations caught the executives by surprise.

“We had not expected this termination,” MacFarlane said. “We had offered to extend our contract with Burlington for a further six months to allow time for a management-led buyout.”

David L. Marshall, chairman of Burlington and Pittston’s vice chairman and chief financial officer, said Monday that the executives were asked to resign because “their personal interest was getting in the way of the company’s interest.”

Marshall has taken over as Burlington’s chief executive since the departure Friday of MacFarlane and Thorrington, who between them own about 1 million shares of Burlington common stock, or 3% of the company’s outstanding shares.

In a letter dated May 15 and delivered to MacFarlane on Monday, Marshall accuses MacFarlane and Thorrington of soliciting financial interest and support from members of Burlington’s top management and from freight agents who represent Burlington abroad. They did so, the letter says, without the knowledge or consent of Pittston’s management.

MacFarlane and Thorrington denied the charges Monday.

“We did not solicit the freight agents,” MacFarlane said. “They came to us at an agents’ meeting in Toledo, Ohio, last month, offering support for a management-led buyout.”

Joseph C. Farrell, Pittston’s chairman and chief executive, said in a telephone interview late Monday, “Obviously, we don’t agree with that statement.”

The air express industry has been struggling during the current recession. As manufacturers have cut back on inventories, orders have declined substantially. For example, Federal Express Corp., one of the nation’s largest air freight companies, has reported losses and is undergoing a major restructuring.

“Most are just surviving, but Burlington differs greatly from other companies because it is a profitable enterprise,” said Larry P. Rodberg, president and chief executive of Eden Air Freight Inc. in Costa Mesa. Eden, a smaller rival of Burlington, has annual revenue of $46 million.

MacFarlane and Torrington’s relationship with Burlington started in 1987, when their air express company, WTC International Inc., was acquired by Pittston in exchange for $65 million worth of Pittston stock. As part of the agreement to buy their company, which was based in the Netherlands Antilles, MacFarlane and Thorrington were to stay with Burlington as co-chief executives for five years. If either of them left before that time, Pittston was to pay that person for the balance of the contract, which expires June 30.

In addition, if either MacFarlane or Torrington was asked to leave before the contract ended, he would not be allowed to form a competing company until after the five-year contract term was up.

MacFarlane and Torrington, both of whom live in Palos Verdes Estates in Los Angeles County, would not say whether they plan to file a lawsuit against Pittston or Burlington for wrongful termination of employment. However, their Costa Mesa attorney, James W. Hamilton, said that their agreement with Burlington allows for termination of their employment only for “certain good reasons,” such as a demotion of either executive or a breach of the contract by the employer.

The company, Hamilton said, “has discharged them without adequate grounds.”