Unexpectedly keen competition to buy the airport gates and takeoff and landing slots of Eastern Airlines has led the bankruptcy judge handling Eastern's case to schedule an auction.
As a result, some of the sale agreements already struck by the trustee who is running the carrier could be off, pending higher offers at the auction Monday.
The auction is good news for the unsecured creditors of Eastern, which shut down Jan. 18 after trying for 22 months to reorganize under Chapter 11 of the Federal Bankruptcy Code.
These creditors, including airplane and engine makers and the carrier's unions, now hope to recover more of, or at least some of, their money through sales of Eastern's assets. In court records, the assets have an estimated value of about $2.4 billion.
Still, it is uncertain the unsecured creditors will end up with any money. There are still substantial costs to liquidating Eastern.
Northwest has already agreed to buy gates and landing and takeoff rights at Washington National Airport for $23.2 million. But a bid by United for the same gates and slots may be a more attractive offer.
As another example of the competition for Eastern's assets, Lawrence M. Handelsman, the lawyer representing Delta Airlines, cited the situation at Los Angeles International Airport.
He said United Airlines had bid $6 million for gates at that airport but that Delta is willing to pay $11 million for the Los Angeles gates.
Indeed, it was Delta that convinced the unsecured creditors' committee an auction was the way to go; this in turn persuaded Judge Burton R. Lifland, chief of the Federal Bankruptcy Court in Manhattan, to schedule the auction.
Other hotly contested Eastern assets are at La Guardia Airport in New York, where Delta wants to buy 10 landing and takeoff slots for $2.5 million, Mr. Handelsman said. United has also expressed interest in Eastern's gates and slots at La Guardia.
Eastern's trustee, Martin R. Shugrue Jr., has accepted Delta's offer to buy 18 gates at Hartsfield International Airport in Atlanta for $41.4 million and the route from Buffalo, N.Y. to Toronto for $1.5 million.