US Airways expands legal case against BA
Thursday 13 March 1997
US Airways said it had included new claims in the legal action, launched last year following British Airways' link-up with American Airlines, to allege that the representatives of the UK group on its board had breached their fiduciary duty. The move means four senior BA executives are now more closely involved in the case.
All four have at one stage been members of the US Airways board following the alliance between the two airlines, formed in 1993, in which BA took a stake of almost 25 per cent in USAir. The executives are Sir Colin Marshall, BA's chairman, Bob Ayling, chief executive, and directors Derek Stevens and Roger Maynard.
The directors stopped attending board meetings after the relationship with US Airways deteriorated dramatically. BA has to decide whether to press ahead with a quick sale of its stake in the carrier.
The original lawsuit filed last summer alleged the new alliance breached anti-trust laws in the US and argued British Airways had failed to act in good faith under existing contracts with USAir.
The latest move to expand the case comes after US Airways' lawyers examined hundreds of pages of documents taken from British Airways and American during the court's discovery process. Because BA and American claim the information is confidential and commercially sensitive the documents have not been made public by the court in New York.
A US Airways spokesman said: "I have not seen the documents. Whatever is there is said to be so confidential that it had to remain private."
The move suggests US Airways is less likely to be prepared to drop its case before it comes to court. The legal action is just one obstacle facing the alliance, which would give the two carriers 60 per cent of flights between the UK and US. Regulators in Washington and Brussels have yet to rule on the link- up, though the UK Office of Fair Trading has indicated it will allow the alliance to go ahead if the airlines give up some runway slots at Heathrow Airport.
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