Suit against Delta-NWA deal seeks to ques­tion CEOs

The Covington News - - Local news eddie webb jr. -

AT­LANTA — A lawyer for 28 air trav­el­ers su­ing to block Delta Air Lines Inc.’s ac­qui­si­tion of North­west Air­lines Corp. wants court per­mis­sion to ques­tion the chief ex­ec­u­tives of four other ma­jor car­ri­ers about their views on air­line in­dus­try con­sol­i­da­tion.

Lawyers for Delta and North­west say grant­ing the re­quest would al­low an “ im­ma­te­rial sideshow” and they are ask­ing a fed­eral judge to re­ject it.

They say they are mind­ful of the cur­rent trial sched­ule and the car­ri­ers’ abil­ity to com­plete the com­bi­na­tion by year end.

U. S. District Judge Vaughn Walker is set to pre­side over the Nov. 5 trial in San Fran­cisco. Tes­ti­mony is ex­pected to last 10 days, and Walker could rule by Thanks­giv­ing.

The Delta- North­west stock- swap deal an­nounced April 14 would cre­ate the world’s largest car­rier in terms of traf­fic.

The deal is likely to gain share­holder and reg­u­la­tory ap­proval, leav­ing court in­ter­ven­tion as the only thing that might stand in the way.

In a let­ter to Walker on Mon­day, plain­tiffs’ lawyer Joseph Alioto said he wants to de­pose the CEOs of Amer­i­can Air­lines, Con­ti­nen­tal Air­lines, US Air­ways and United Air­lines about pub­lic state­ments they have pre­vi­ously made about in­dus­try con­sol­i­da­tion. Alioto said some of the com­ments were in­cluded in a doc­u­ment sub­mit­ted by North­west’s CEO to North­west’s board of direc­tors.

Alioto ac­knowl­edged that a dead­line for de­po­si­tions to be taken has passed, but he said he doesn’t be­lieve there should be a prob­lem.

“ I felt there was no un­due prej­u­dice,” Alioto wrote.

In a joint let­ter Tues­day re­spond­ing to Alioto’s re­quest, North­west lawyer Henry Thu­mann and Delta lawyer Don­ald Flexner said the re­quest is in­ap­pro­pri­ate and should be de­nied.

“ To now de­part from the es­tab­lished sched­ule to pur­sue this col­lat­eral and ul­ti­mately im­ma­te­rial sideshow will place ex­treme and un­war­ranted stress on the par­ties’ abil­ity to timely meet both the re­main­ing dead­lines and the es­tab­lished trial date,” the lawyers wrote.

They also said that the ear­li­est pos­si­ble clos­ing of the deal to com­bine At­lanta- based Delta and Ea­gan, Minn.- based North­west is im­por­tant to achiev­ing con­sumer ben­e­fits and ef­fi­cien­cies that the trans­ac­tion will af­ford.

If the plain­tiffs’ re­quest is granted, the lawyers for Delta and North­west said, sub­poe­nas would have to be is­sued for the four CEOs and some of them would likely fight the sub­poe­nas, which would take time.

“ The like­li­hood of ac­com­plish­ing all of this in the ap­prox­i­mately seven weeks re­main­ing be­fore trial is sim­ply not re­al­is­tic,” the lawyers wrote.

There was no im­me­di­ate rul­ing by Walker on the plain­tiffs’ re­quest for court per­mis­sion to ques­tion the four CEOs.

The plain­tiffs are seek­ing an in­junc­tion to block the com­bi­na­tion, ar­gu­ing that it vi­o­lates an­titrust law and will sub­stan­tially lessen com­pe­ti­tion.

The law­suit was filed June 18 in U. S. District Court in San Fran­cisco.

IN­FOR­MA­TION COUR­TESY OF THE POTTING SHED

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