Judge Decides on TWA Assets
Monday, March 12th 2001, 12:00 am
By: News On 6
WILMINGTON, Del. (AP) - A federal judge was expected to decide Monday whether the assets of bankrupt Trans World Airlines Inc. will be sold to AMR Corp.'s American Airlines for $742 million plus the assumption of $3.5 billion in TWA debt.
Observers have predicted U.S. Bankruptcy Judge Peter Walsh would select American's bid because he said in a hearing last week that three competing bids, including one submitted by billionaire financier Carl Icahn, were not valid.
Walsh was expected to issue his decision about noon EST.
The chief executive of Trans World Airlines testified Saturday he will be forced to liquidate his carrier if a sale for most of its assets to AMR Corp.'s American Airlines is not approved.
William F. Compton, a former TWA pilot who still holds the title of captain, said such a liquidation could come ``very quickly.''
Walsh is under pressure to make a decision because creditors who hold the leases for most of TWA's jets could move to seize the planes if payments are not made Monday.
American's offer includes $130 million in emergency financing that would be wired to the planes' creditors Monday afternoon.
What appears to be the main competition to American's offer, a $1.1 billion bid from former TWA owner and corporate raider Carl Icahn, was dismissed Friday by Walsh as a ``joke.'' He refused to allow Icahn's attorneys call witnesses or present evidence in support of the bid.
With Walsh's decision, American could close the sale with TWA by early April. Those who object will have 10 days to file an appeal.
The judge was also expected rule on Icahn's lucrative ticket contract, which allows him to buy certain TWA tickets at 55 cents on the dollar.
Icahn resells the tickets on the Internet at steep discounts. Airline experts have said the deal is partly to blame for TWA's financial failure.