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Creditors Snub Delta's Bid for Pan Am Assets : Airlines: The Atlanta-based carrier will press on with its offer. Creditors' approval isn't needed, but it helps in bankruptcy court.

July 31, 1991|From Associated Press

NEW YORK — Pan Am's efforts to peddle key assets was thrown into doubt Tuesday with the rejection by its creditors committee of an offer from Delta Air Lines.

Delta and Pan Am management agreed to a $310-million deal for Pan Am's Northeast shuttle, European routes and other assets.

Delta said it will press ahead with its proposed offer. Creditor approval of asset sales is not needed but strengthens the chance it will win approval in bankruptcy court.

"We feel it's the strongest package available," Delta spokesman Neil Monroe said.

The rejection came as UAL Corp., parent of United Airlines, dropped its offer to buy Pan Am's Latin American routes after meeting with the struggling airline's creditors.

A United spokesman did not give a reason for withdrawing its $235-million offer.

However, an industry executive who requested anonymity said the creditors thought that the Delta deal was too low and were seeking to drive the bidding higher for Pan Am assets. Several phone calls Tuesday to a lawyer for the Pan Am creditors, Leon Marcus, went unreturned.

Pan Am, which filed for bankruptcy reorganization in January, said Sunday it had accepted Delta's offer for Pan Am's Boston-New York-Washington shuttle, three U.S.-London routes, Pan Am's Frankfurt operation and 45 planes.

Details of Delta's offer were filed with the bankruptcy court Monday.

Delta is competing for parts of Pan Am with TWA, which itself announced Tuesday that it would file for bankruptcy protection from its creditors.

Trans World Airlines has said it would pay $280 million for Pan Am's European routes, Northeast shuttle and other assets, assume $30 million in ticket liabilities and arrange an infusion of $140 million into what is left of Pan Am's operations.

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