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FORMER PAN AM WORKERS FILE $1.1 BILLION LAWSUIT AGAINST DELTA CHARGING BREACH OF CONTRACT BY DELTA IN ACQUISITION OF PAN AM

 FORMER PAN AM WORKERS FILE $1.1 BILLION LAWSUIT AGAINST DELTA
 CHARGING BREACH OF CONTRACT BY DELTA IN ACQUISITION OF PAN AM
 NEW YORK, March 12 /PRNewswire/ -- A committee representing approximately 8,000 former Pan Am employees charged today in a $1.1 billion class action lawsuit that Delta Air Lines (NYSE: DAL) breached its contract to support a reorganized Pan Am after acquiring Pan Am's most valuable assets in 1991, resulting in the loss of jobs and benefits for approximately 8,000 Pan Am employees.
 The lawsuit, which was filed in United States District Court in Manhattan, charges that the terms of the agreement Delta signed on Aug. 11, 1991, to support and invest in Pan Am specifically called for the continued employment of at least 6,900 employees with a newly reorganized Pan Am, which was to have Delta as a financial backer and 45 percent shareholder.
 The lawsuit documents how Delta, over a three-month period, provided repeated written and verbal assurances to Pan Am employees, including a letter from Delta Chairman Ronald Allen, that they would be employed under a new reorganized Pan Am and that Delta would support the reorganized Pan Am.
 However, according to the lawsuit, on Dec. 3, 1991, less than one day before the reorganization plan for the new Pan Am was to be approved by the Bankruptcy Court, Delta unexpectedly announced that it would not advance the final $25 million of the $140 million that it had agreed to provide under an agreement to fund the new Pan Am. The next day Pan Am ceased operations, leaving thousands of Pan Am employees out of work including some who had relocated at their own expense to Miami, which was to be the base of operations of the new Pan Am.
 According to the lawsuit, Delta also failed to implement actions it had promised to take to reduce Pan Am's losses, including providing $100 million in funding; coordinating its schedules with Pan Am; sharing codes between Delta and Pan Am; and proceeding with a marketing plan.
 The lawsuit also charges that Delta selectively diverted Pan Am's key personnel and equipment to its own use and hired employees out of seniority order. As a result of Delta's actions, Pan Am's operating losses mounted, which eventually led Pan Am to seek the additional promised funding from Delta to continue operations until the effective date of the reorganization.
 "This lawsuit is about a breach of contract by Delta Air Lines and how that action has devastated the lives of thousands of dedicated and hard-working people," said Patricia Herlihy, a spokesperson for Severed Employees' Legal Fund, a committee representing 8,000 former Pan Am employees, several of whom are named as plaintiffs in the class action suit.
 The former Pan Am employees are being represented in this matter by the law firm of Whitman & Ransom, 200 Park Ave., New York, N.Y. John M. Hadlock, Hugh H. Mo and John E. Tardera are handling the lawsuit at the firm.
 -0- 3/12/92
 /CONTACT: Geoffrey Thompson or Dean Bender of Thompson & Bender, 914-747-2888, for Severed Employees' Legal Fund/
 (DAL) CO: Delta Air Lines; Pan Am; Severed Employees' Legal Fund ST: New York, Georgia, Florida IN: AIR SU:


GK-SH -- NY007 -- 7720 03/12/92 11:00 EST
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Publication:PR Newswire
Date:Mar 12, 1992
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