Antitrust attorneys for American Airlines and US Airways told reporters on a conference call Wednesday that the government's lawsuit against their proposed merger is weak and they are ready to litigate the case in federal court. They said that while there have been antitrust settlements in past cases, only once in the past eight years has the federal government won an antitrust challenge that was ultimately decided by a federal judge.
Asked if there was a parallel track of settlement talks, Paul Denis, an attorney representing US Airways who has been involved in the talks from the start, answered: "We're litigating this case, period." Richard Parker, an attorney with O'Melveny & Myers brought into the case more recently, added that "if the government has a creative alternative, we'll certainly listen to it." But for now, he said, "we're preparing for trial."
Other highlights of the conference call:
- When the airlines learned of the suit: The morning it was filed.
- What the government's lawsuit means: Some news reports make it sound that because of the suit, the merger isn't gong to happen, and that's not so, said Joe Sims, a Jones Day attorney representing American. "The fact of the matter is, of course, is all the government has done is lay down a marker. It's a very long marker, 56 pages, but they have to convince the judge that this merger is anti-competitive."
- Whether the lawsuit was a surprise: "While it may have been a surprise to people outside the process, it was not a surprise to people inside the process," said Denis. Until the government says its objections are satisfied, it can sue, he said. "We're surprised at the complaint because it's not as strong as we thought" it would be, he said. Said Sims: Antitrust negotiations "all follow the same path -- discussions, concerns, answers, and eventually you get to meetings with the decision-makers, which we did not too long ago, and it's only after you have those meetings that the decision-makers make up their minds. The timing really was driven by the DOJ's process, and the way it always works is, until you get to the end, as long as there are concerns you don't know what the answer is going to be." Added Denis: "To take some of the drama out of this, DOJ has a strong preference to sue before the transaction is closed. It was not a secret the bankruptcy court confirmation hearing was (Aug.) 15th. It was not a surprise they chose to file before the 15th."
-- Jim Fuquay