TWA Pilots Withdraw Request for Injunction Against Icahn Plan
NEW YORK (AP) _ The pilots union at Trans World Airlines Inc. on Thursday withdrew its legal petition for an immediate injunction blocking Chairman Carl Icahn’s plan to take the airline private.
The pilots retained their lawsuit against Icahn’s privatization scheme, however.
The pilots’ withdrawal of the petition, which came at a preliminary hearing before New York State Supreme Court Judge Michael J. Dontzin, was in return for a guarantee that Icahn gave at the hearing. The financier promised that, if the pilots’ lawsuit against his plan is decided in their favor, he would reinvest in the airline around $470 million that he originally planned to take out of it.
A trial on the pilots’ lawsuit has been scheduled for the first week of December.
In addition, the union representing TWA flight attendants has asked the Department of Transportation to block the privatization and freeze the airline’s assets while it investigates Icahn’s fitness to continue managing TWA.
The TWA pilots union joined the flight attendants’ petition about two weeks ago.
″Until our concerns are resolved, we have to press forward with all the avenues we can,″ said Kent Scott, vice chairman of the TWA pilots union in St. Louis.
The Consumer Federation of America has filed a similar petition.
Joan Wages, a spokeswoman in New York for the TWA flight attendants union, said the group’s petition to the DOT will remain active following Icahn’s guarantee and the pilots’ move.
″We’re very pleased about that,″ Ms. Wages said, referring to Icahn’s commitment.
The TWA chairman, who now owns around 77 percent of TWA’s 30.5 million common shares outstanding, won approval from shareholders in early September for his privatization plan.
The airline said Thursday it expects the transaction to be completed on Oct. 24.
Under the plan, Icahn and the financial entities controlled by him would own about 90 percent of TWA’s stock, while the remaining shares would be held by an employee stock ownership plan.
Airline industry analysts estimate the bid puts a value of around $40 a share, or $304.8 million, on the TWA shares that Icahn does not already own.
Icahn recently broke off efforts to acquire ailing Eastern Airlines, a subsidiary of Texas Air Corp., after failing to structure a deal that would satisfy the carrier’s unions.