ATLANTA -- ValuJet Inc. and its top executives are named in a lawsuit by three shareholders who say the company issued false assurances that its planes were safe.
The ValuJet shareholders, seeking class-action status, filed the lawsuit yesterday in U.S. District Court in Atlanta against the Atlanta-based airline, Chairman Robert Priddy, President Lewis Jordan, Vice Chairman Maurice Gallagher and Chief Financial Officer Stephen Nevin.
ValuJet already is the subject of lawsuits from several families of the 110 passengers who were killed May 11 when a ValuJet plane crashed in the Florida Everglades, leaving no survivors.
The shareholders, who bought ValuJet shares between June 9, 1995, and the time of the crash, say the company made public statements regarding the safety of its fleet, inflating its stock price.
ValuJet shares, which traded as high as $34.75 in November, closed yesterday at $14.3125. The stock plunged to a low of $11 earlier this month as safety issues emerged after the crash.
ValuJet, a low-fare, no-frills airline that began operations three years ago, halved the number of its daily departures after the crash.
The plaintiffs in the latest suit say Jordan touted the airline's safety record, when in fact ValuJet's safety record has been poor.
The lawsuit cites a Federal Aviation Administration report that singled out ValuJet as more accident-prone than its low-cost competitors as counter to the airline's claim that it was safe to fly.
The shareholders are seeking to recover the losses they incurred when ValuJet stock tumbled.
ValuJet officials couldn't be reached yesterday for comment.
Pub Date: 5/31/96
