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AMR wins TWA bidding
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March 12, 2001: 2:52 p.m. ET
Bankruptcy judge, as expected, to accept $742M offer for carrier in Chapter 11
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NEW YORK (CNNfn) - American Airlines' $742 million bid for Trans World Airlines will be accepted by the federal bankruptcy judge overseeing TWA's case, TWA confirmed Monday.
As expected, Federal Bankruptcy Judge Peter Walsh will accept the offer by AMR Corp.'s (AMR: Research, Estimates) American Airlines after he said in a hearing last week that three competing bids, including one submitted by billionaire financier Carl Icahn, were not valid.
 Walsh said to deny the sale to American "would put this Chapter 11 case in a free-fall context and (create) a collapse of TWA with the consequential loss of value" for all creditors.
"I'm convinced that given this debtor's history, if this court were to deny the (sale)," there would be an "immediate and precipitous decline in the affairs of the debtor with a very, very high probability, if not certainty, of a liquidation," Walsh said, speaking from prepared remarks.
There will be a 10 day waiting period before the judge's order goes into effect and the deal still requires federal approval.
"The major issue it trying to get the Justice Department to keep up with the rapid progress we are making," TWA President and CEO Bill Compton said in a conference call.
Compton refused to predict how Justice would rule on the antitrust issue, but said he had spoken to the department several times.
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Compton testified Saturday that he would be forced to liquidate the carrier if a sale of most of its assets to American Airlines, the No. 2 U.S. carrier, were not approved.
After the deal is completed, TWA will run as a separate entity for a time before it is integrated into American. Compton said he does not expect any disruption to the TWA flight schedule.
TWA's contracted workers are expected to be given jobs with American, while management and non-contract workers will be assessed on a case-by-case basis.
Compton said American has "made it clear they will hire many, many of our non-contract and management employees."
AMR stock fell 72 cents to $35.73 in afternoon trading Monday.
-- From staff and wire reports 
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