Texas Air Corp. filed suit Friday against Trans World Airlines chairman Carl Icahn, accusing him and his airline of trying to sabotage the $463.9 million sale of Eastern Airlines to a group led by Peter V. Ueberroth.
The suit accuses Icahn and TWA of conspiring and negotiating with union officials to deal with TWA rather than Ueberroth for the sale of strikebound Eastern.Texas Air spokesman Ned Walker said the suit did not specify damages, but added, "We believe they could be very, very substantial."
The suit was filed as a bankruptcy judge in New York was urging representatives of Ueberroth, Eastern, its creditors and its unions to expedite the agreement so the carrier could return to the air.
Texas Air said Icahn's talks with union officials at Eastern would create "delay, confusion and economic damage" that could "obviously provide the opportunity for Mr. Icahn to buy assets at bargain basement prices."
"Mr. Icahn and TWA are competitors of Eastern and they have every motive to try to scuttle these important negotiations," the statement said. "By negatively influencing discussions with the unions and the Ueberroth/Talbot group, Mr. Icahn can hope to frustrate Eastern flying again and make a more favorable deal for himself."
Walker would not say when or where the talks took place but did say, "We would not have filed the suit unless we had very strong evidence as to Mr. Icahn's activities."
He said the suit was filed in Fort Bend County because the court docket there is more current than in Harris County, which includes Houston. "We can go to trial there much more quickly," he said.
In New York, U.S. Bankruptcy Judge Burton Lifland complained that Eastern "has not assured the immediate scheduling of flights even on an interim basis" and directed attorneys to get the carrier back into the air.
Lifland, who has emphasized his No. 1 priority is getting the "birds flying immediately" for the public good, ordered representatives of Ueberroth, Eastern, its creditors and unions into a conference in his chambers "to consider appropriate measures to accommodate the urgent needs of this case."
Later, the attorneys refused to disclose specifics of their talk, but Eastern lawyer Bruce Zirinsky said there were no new developments that could have an impact on completion of the deal with the former baseball commissioner.
Robert J. Rosenberg, an attorney for Ueberroth, said of the meeting, "All heads were knocked together."
The deal, which would give Ueberroth's group a 30 percent stake in Eastern, with another 30 percent to be controlled by the unions and the remaining 40 percent by new investors, is subject to Ueberroth reaching agreement with the unions by April 11 and a host of other contingencies.
Ueberroth, who was not at the hearing, was said to be negotiating with union representatives in Washington, D.C.. The Air Line Pilots Association has said Ueberroth is seeking $210 million in concessions from the unions.
Eastern, virtually grounded by a strike by machinists that began March 4, filed for Chapter 11 bankruptcy protection from creditors several days later.