For Many, Cell Phones Alter Reality
Two U.S. airlines have come forward to challenge the planned $500-million sale of Trans World Airlines Inc. to American Airlines, saying they could make more attractive offers for TWA’s assets.
In court papers released Wednesday, Continental Airlines Inc. said it would be willing to pay as much as $400 million for some of those assets as part of an alternative plan for TWA’s emergence from bankruptcy.
TWA, the eighth-largest U.S. airline which filed for Chapter 11 bankruptcy protection two weeks ago, has agreed to sell most of its assets to AMR Corp.’s American Airlines. But in court filings, Continental joined Northwest Airlines Corp. in objecting to the prearranged plan with American and saying they might bid for TWA assets.
Continental spokesman Dave Messing said the company’s proposal offers various advantages, including the possibility that TWA would continue as an independent airline.
“That would certainly be something that needs to be examined as an alternative to the American Airlines proposal,” he said, “which was essentially arranged in secret and is now being proposed as a one-stop shopping solution, which may not be in the best interest of creditors, employees, shareholders and the American traveling public.”
Meanwhile, financier Carl Icahn, who also opposes AMR’s proposed buyout of TWA, said in court papers he would help finance the efforts of unnamed “others” to help TWA emerge from bankruptcy as an independent airline.
Icahn claims to be one of TWA’s largest creditors through his holdings of about $50 million in secured bonds, $15 million in unsecured bonds and an agreement for discounted TWA tickets that Icahn values at about $200 million.
“We will review [the filings] and if there’s a response on our part, it will probably come in court,” said TWA spokesman Mark Abels.
“We think the American proposal is a good, global solution. But the purpose of an auction process is to invite higher and better offers to come forward, and we’re interested in seeing the offers.”
American said it was aware that other airlines might express interest in TWA assets, but “in this case, neither of the carriers filing comments has made an actual offer, and their comments suggest that they are interested in simply stripping valuable TWA assets without keeping the airline intact.”
The objections of Icahn, Continental and Northwest will be considered by U.S. District Judge Sue Robinson at a hearing Saturday in U.S. Bankruptcy Court in Delaware.
In New York Stock Exchange trading, AMR shares fell $1 to close at $37.16; Continental rose 6 cents to close at $48.75 and Northwest fell 16 cents to close at $25.75.
