Out-of-Court Settlement Reached in Laker Suit.
Jul. 12, 1985
WASHINGTON (AP) _ An out-of-court settlement has been reached in the antitrust lawsuit filed by the now-defunct Laker Airways against British Airways and 11 other defendants, attorneys involved in the negotiations told a federal judge today.
No overall figure on the settlement was announced immediately. However, British Airways and the Laker liquidators were expected to make announcements later.
Sidney S. Rosdeitcher, attorney for British Airways and the other defendants, told U.S. District Judge Harold H. Greene that there are several unresolved matters but that the agreement would go forward in any case.
He said Sir Freddie Laker, a major shareholder in the now-bankrupt airline, was offered $8 million ''in return for an acceptable release of all claims.'' Laker has not yet accepted, he said. ''If Sir Freddie declines to accept the $8 million, the settlement will nonetheless proceed,'' the agreement says.
The agreement also calls for an offer of $50,000 to Mrs. Joan Laker, Laker's wife, for her 500,000 shares in the airline. She has not yet accepted.
The 12 defendants have offered two law firms, Beckman & Kirstein and Metzger and Shadyac & Schwarz, $8 million for attorneys' fees, but they have declined to accept. That offer remains open, Rosdeitcher said.
He asked the judge to assist in resolving the issue of attorneys' fees.
Terms of the agreement include:
-Creditors whose claims are under 50,000 British pounds (about $36,000 at current rates) will be paid the full amount of their debt. These creditors are principally ticket claimants and ex-employees.
-Creditors whose claims exceed 50,000 pounds, except for the larger ones, will be paid 50,000 pounds plus 20 percent of their claim. Only two of the approximately 45 creditors in this category have not yet accepted the offer, Rosdeitcher told the court. Eighty percent of the creditors have already been paid.
-The larger creditors, which include all major financing and manufacturing creditors such as Exim Bank, the syndicate of banks headed by Midland Bank, Clydesdale Bank, Mitsui, Royal Bank of Canada, General Electric Credit Co. and Airbus Industrie, have agreed to accept $250,000 for an assignment of their claims with an acknowledgment that the U.S. antitrust suit may be discontinued. There also will be a payment of any interest due as of Feb. 5, 1982.
Laker, which suspended operations in 1982, claimed in its suit that nine international airlines and others conspired to force it out of business. It said the other airlines persuaded McDonnell Douglas Corp., the airplane manufacturer, to withdraw preferred financial help for Laker by threatening to stop doing business with McDonnell Douglas.
Laker's receivers sought more than $1 billion from the nine airlines - Pan American World Airways, Trans World Airlines, Lufthansa, Swiss Air, KLM, Sabena and UTA, a French carrier, in addition to British Airways and British Caledonian and McDonnell Douglas and its financing subsidiary.
At the time of its collapse in February 1982, Laker's low-cost, no-frills ''Skytrain'' was carrying one of every five trans-Atlantic air passengers.