AIRLINES: Peanuts from a Greedy Parent

Peanuts from a Greedy Parent

Ever since Eastern Air Lines went bankrupt a year ago this week, its creditors and unions have contended that Texas Air, the troubled carrier's parent firm, had stripped the airline like an abandoned car. Last week the bankruptcy-court examiner endorsed that view, ruling that Texas Air underpaid Eastern by as much as $403 million in twelve separate transfers to Continental Airlines and other Texas Air units of such assets as aircraft and airport gates. In the most egregious case, Texas Air paid Eastern only $100 million for the airline's entire computer reservations unit. Yet last month the parent firm sold a...

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