DALLAS -- Nothing comes easy in LTV Corp.'s bankruptcy reorganization.
What appeared to be a smooth sale of its aircraft and missiles business to a joint venture formed by Martin Marietta Corp. and Lockheed Corp. may become entangled in a congressional inquiry or even land on President Bush's desk.
A competing bid from a French military electronics contractor could delay LTV's emergence from bankruptcy, as issues concerning the sale of classified technology make their way through the legislative and executive branches.
Last night, LTV's creditors were presented an undisclosed offer to purchase the defense operations from Thomson CSF and the Carlyle Group, a Washington-based investment firm led by former secretary of defense Frank C. Carlucci.
That long-rumored offer may make its public debut today at a bankruptcy court hearing in New York.
That hearing has been scheduled to review the agreement reached in February between LTV and the Martin Marietta-Lockheed venture. The two companies want to purchase the defense business for $355 million and rename it Vought Corp., after its founder, Chance Vought.
Lockheed and Martin Marietta plan for the joint venture to operate under current management, with its own board of directors. The two companies said Richard J. Boyle, currently president and chief executive officer of LTV Aerospace and Defense Co., would serve as chairman and chief executive of Vought. Monday, Lockheed and Martin Marietta named six outside directors to Vought's seven member board.
Creditors, who will largely be repaid with LTV stock for the $6 billion owed them, wouldn't mind a bidding war for what was the company's crown jewel when LTV filed for bankruptcy in July 1986, in the days of growing defense budgets.
Last week, LTV's creditors said the proposed $355 million deal with Martin Marietta and Lockheed "appears inadequate."
But LTV also needs cash to meet pension obligations. LTV agreed last year, after years of litigation with the federal Pension Benefit Guaranty Corp., to repay pension obligations of LTV Steel totaling more than $3 billion. The sale of the aircraft and missile business is part of that plan.
"It's better to have more people interested in purchasing the aerospace company than fewer," said Wilbur Ross, a financial adviser to LTV Corp. creditors, who are interested in hearing the Thompson-Carlyle bid.