TWA FAVORS AMERICAN AIRLINESÆ BID
Bankrupt airline Trans World Airways Inc. selected a $742-million deal from AMR Corp.'s American Airlines as its preferred bid at a bankruptcy auction on Wednesday.
TWA selected American over an offer from former owner Carl Icahn. However, the final decision will come from U.S. Bankruptcy Judge Peter Walsh, who will consider several offers during a sale hearing today in Wilmington, Del.
The Icahn-backed group offered a $650-million bid which would have kept TWA flying under its own name. The bid included several conditions, including requiring TWA's two unions to agree to concessions.
American's initial bid was $500 million, plus the assumption of $3.5 billion in debt and lease obligations. American, at the request of TWA, increased its bid Wednesday afternoon by $242 million. American has already provided TWA with $200 million in debtor financing. If American's bid is selected, the Texas airline will pay TWA $742 million in case, minus the debtor financing TWA has used.