Business briefs for April 9. 2001

Monday, April 9, 2001 | 11:22 a.m.

TWA-American merger delayed by court

NEW YORK -- A federal appeals court halted today's planned sale of Trans World Airline's assets to American Airlines' parent company after a group of TWA workers from Israel protested the transaction.

The 3rd U.S. Circuit Court of Appeals in Philadelphia issued a temporary stay over the weekend in response to a petition from the Jewish Labor Federation, court clerk Marci Waldron said today.

The labor federation, which represents about 100 Israeli TWA employees and retirees, wants the appeals court to send the case back to federal bankruptcy court for further consideration, said Bruce Zabarauskas, the lawyer representing the workers.

The workers are unsecured creditors owed about $18 million in salaries and benefits, he said.

"Basically they are losing their jobs and they're not getting any payments," Zabarauskas said. "We're seeking to prevent the sale from going forward."

Billionaire investor Carl Icahn -- owner of three Las Vegas hotel-casinos -- also has been fighting the deal because American wants to cancel a deal in which Icahn's Las Vegas company Lowestfare.com buys TWA tickets at a discount and then resells them at a profit.

Airline in pact with mechanics

MINNEAPOLIS -- Northwest Airlines and its mechanics reached a tentative contract agreement early today, days before arbitrators were to recommend settlement terms to end a stalemate.

Steve MacFarlane, president of Local 33 of the Aircraft Mechanics Fraternal Association, said union members would be briefed during the next two weeks in anticipation of a ratification vote.

He would not provide details of the tentative agreement reached after 20 hours of weekend bargaining before the National Mediation Board.

Richard Anderson, chief executive of Northwest Airlines, also confirmed the tentative deal but would not provide details.

Northwest's stock rose by more than 4 percent on the news by midday Monday. The airline's shares were trading at $22.56, up 94 cents, on the Nasdaq Stock Market.

Talks between the union and the nation's fourth-largest airline collapsed last month, and Northwest mechanics prepared to go on strike until President Bush stepped in. Bush appointed an emergency board on March 11, preventing a strike for 60 days. The board had been given 30 days to issue a nonbinding report recommending settlement terms.

LV consultant sued over defection to Prudential

Merrill Lynch, Pierce, Fenner & Smith Inc., which accused a former Las Vegas financial consultant of defecting to rival Prudential Securities Inc., sued to stop him from violating his non-compete agreement and soliciting Merrill Lynch's clients.

In a U.S. District Court lawsuit, Merrill Lynch sued Rolando Garcia, who was hired at its Las Vegas office on July 6, 1992, and resigned allegedly without notice on March 29, alleging he conspired with Prudential while he was still employed by Merrill Lynch to "wrongfully convert Merrill Lynch records and to secretly divert Merrill Lynch customers to Prudential."

The suit said Garcia had access to Merrill Lynch books and records that revealed customer names, addresses and financial information of 307 Merrill Lynch accounts, representing more than $25.9 million in assets. The accounts generated more than $544,000 in Merrill Lynch commission revenues in 2000, the firm said.

Garcia could not be reached for comment.

Former Nevada senator named to consumer advisory board

Former Nevada Sen. Richard Bryan has been named to a consumer advisory board for Orbitz, an Internet airline ticketing company that will begin operations this summer.

Bryan, who served in the Senate from 1989 until his retirement this year, will be on a board that will advise the Orbitz board of directors on consumer issues associated with the new company. Other consumer advisory board members include Chairman Con Hitchcock, travel writer Valarie D'Elia, Internet entrepreneur Esther Dyson and "Internet for Dummies" author John Levine.

Bryan, who now is an attorney with Lionel, Sawyer & Collins, said he would be paid $47,000 a year to serve on the board, which is expected to arrange for its first meeting later this month.