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News > Deals
Way cleared for AMR-TWA
April 9, 2001: 3:46 p.m. ET

Third Circuit lifts stay in AMR-TWA merger, clearing way for the deal
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NEW YORK (CNNfn) - A U.S. Appeals Court lifted its stay on AMR Corp.'s acquisition of Trans World Airlines Monday, clearing the way for completion of the $742 million purchase of TWA.

American Airlines spokesman John Hotard said the ruling by U.S. Circuit Judge Samuel Alito lifting the stay would allow the sale to be completed Monday afternoon.

"It may take a few hours to do all the paperwork because there's a lot of paperwork involved," he said. "By the end of the day, we will own the assets of TWA."

The merger will make American Airlines the world's largest air carrier. The purchase of bankrupt TWA already has received approval from Department of Justice and Department of Transportation regulators, as well as the approval of TWA's unions.

graphicThe Third U.S. Circuit Court of Appeals in Philadelphia granted a temporary stay Saturday to resolve issues raised by the General Federation of Jewish Labor in Israel. The Israeli union, which represents TWA employees in Israel, alleged that AMR's purchase of TWA would strip the Israeli union of U.S. protections and leave its retirees without pension benefits.

"The stay granted on Saturday, April 7, 2001, in response to the emergency motion of the General Federation of Jewish Labor in Israel is hereby vacated," said a handwritten order signed by Judge Alito Monday and obtained by Reuters.

A federal appeals court also rejected an 11th-hour bid Saturday to block the deal from unsecured creditors, led by former TWA owner Carl Icahn, who had sought to keep the airline independent.

AMR (AMR: down $0.07 to $33.90, Research, Estimates) will temporarily operate TWA as a separate airline as it works on integrating it into American's system.

AMR moves past UAL Corp.'s United Airlines to be the largest air carrier, but UAL (U: up $0.16 to $34.15, Research, Estimates) that would allow it to recapture the No. 1 title.

Shares of TWA have not traded since the bankruptcy filing in January.

-- from staff and wire reports graphic





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