[Federal Register Volume 60, Number 33 (Friday, February 17, 1995)]
[Notices]
[Pages 9399-9406]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-3889]



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DEPARTMENT OF JUSTICE
Antitrust Division


United States v. Sabreliner Corporation; Proposed Final Judgment 
and Competitive Impact Statement

    Notice is hereby given pursuant to the Antitrust Procedures and 
Penalties Act, 15 U.S.C. 16(b)-(h), that a proposed Final Judgment and 
Competitive Impact Statement have been filed with the United States 
District Court for the District of Columbia in United States of America 
v. Sabreliner Corporation.
    The Complaint in this case alleges that the acquisition of Midcoast 
Aviation, Inc. (``Midcoast'') by Sabreliner Corporation 
(``Sabreliner'') may substantially lessen competition in the sale of 
jet fuel to transient general aviation aircraft at Lambert-St. Louis 
International airport (``Lambert'') in violation of Section 7 of the 
Clayton Act.
    Sabreliner and Midcoast are the only two fixed base operators 
(``FBOs'') at Lambert Field. Fixed base operators provide terminaling 
services, such as aircraft cleaning, de-icing and fueling to general 
aviation aircraft. These services are typically included in the price 
of jet fuel sold to the general aviation customer. This acquisition, 
left unchallenged, would result in a monopoly in the provision of jet 
fuel to transient general aviation customers at Lambert.
    The proposed Final Judgment requires Sabreliner to divest either 
its transient general aviation fueling facilities at Lambert, or, if 
necessary to attract a purchaser, its entire FBO operation at Lambert. 
If defendant does not complete the divestiture by the allotted time, a 
trustee will be appointed to conduct the divestiture.
    Public comment on the proposed Final Judgment is invited within the 
statutory 60-day comment period. Such comments, and responses thereto, 
will be published in the Federal Register and filed with the Court. 
Comments should be directed to Roger W. Fones, Chief, Transportation, 
Energy, and Agriculture Section, Antitrust Division, Room 9104, 
Judiciary Center Building, 555 4th Street, NW., Washington, DC 20001 
(202-307-6351).
Constance K. Robinson,
Director of Operations, Antitrust Division.
    United States of America; Plaintiff; vs. Sabreliner Corporation, 
a corporation; Defendant.

[Docket Number: 95-0241]

Stipulation

    It is stipulated by and between the undersigned parties, by their 
respective attorneys, as follows:
    (1) The Court has jurisdiction over the subject matter of this 
action and over each of the parties hereto, and venue of this action is 
proper in the District for the District of Columbia.
    (2) The parties consent that a Final Judgment in the form hereto 
attached may be filed and entered by the Court, upon the motion of any 
party or upon the Court's own motion, at any time after compliance with 
the requirements of the Antitrust Procedures and Penalties Act (15 
U.S.C. 16), and without further notice to any party or other 
proceedings, provided that plaintiff has not withdrawn its consent, 
which it may do at any time before the entry of the proposed final 
Judgment by serving notice thereof on defendant and by filing that 
notice with the Court.
    (3) In the event plaintiff withdraws its consent or if the proposed 
Final Judgment is not entered pursuant to this Stipulation, this 
Stipulation shall be of no effect whatever, and the making of this 
Stipulation shall be without prejudice to any party in this or any 
other proceeding.

    Dated: November 2, 1994.

    [[Page 9400]] For Plaintiff United States of America:
Anne K. Bingaman,
Assistant Attorney General.
Steven C. Sunshine,
Deputy Asst. Attorney General.
Constance K. Robinson,
Director of Operations.
Roger W. Fones,
May Jean Moltenbrey,
Kelly Signs,
Stephen B. Donovan,
Attorneys.
    For Defendant Sabreliner Corporation:
Winthrop, Stimson, Putnam & Roberts,
By: John Gillick,
A Member of the Firm.
Final Judgment

    Whereas, plaintiff, United States of America, having filed its 
Complaint herein on February 6, 1995, and plaintiff and defendant, by 
their respective attorneys, having consented to the entry of this Final 
Judgment without trial or adjudication of any issue of fact or law 
herein and without this Final Judgment constituting any evidence 
against or an admission by any party with respect to any such issue;
    And whereas, defendant has agreed to be bound by the provisions of 
this Final Judgment pending its approval by the Court;
    And whereas, prompt and certain divestiture is the essence of this 
agreement, and defendant has represented to plaintiff that the 
divestiture required below can and will be made and that defendant will 
later raise no claims of hardship or difficulty as grounds for asking 
the Court to modify any of the divestiture provisions contained below;
    Now, therefore, before the taking of any testimony and without 
trial or adjudication of any issue of fact or law herein, and upon 
consent of the parties hereto, it is hereby
    Ordered, adjudged and decreed as follows:

I

Jurisdiction

    This Court has jurisdiction over the subject matter of this action 
and over each of the parties hereto. The Complaint states a claim upon 
which relief may be granted against defendant under Section 7 of the 
Clayton Act, as amended (15 U.S.C. 18).

II

Definitions

    As used in this Final Judgment:
    A. ``TWA'' means Trans World Airlines, Inc., each of its 
predecessors, successors, divisions, subsidiaries, and affiliates, each 
person directly or indirectly, wholly or in part, owned or controlled 
by it, or which owns or controls it, and each partnership or venture to 
which any of them is a party, and each officer, director, employee, 
attorney, agent, or other person acting for or on behalf of any of 
them.
    B. ``Midcoast'' means Midcoast Aviation, Inc., each of its 
predecessors, successors, divisions, subsidiaries, and affiliates, and 
each person directly or indirectly, wholly or in part, owned or 
controlled by it, or which owns or controls it, and each partnership or 
venture to which any of them is a party, and each officer, director, 
employee, attorney, agent, or other person acting for or on behalf of 
any of them.
    C. ``Sabreliner'' means defendant Sabreliner Corporation, each of 
its predecessors, successors, divisions, subsidiaries, and affiliates, 
each person directly or indirectly, wholly or in part, owned or 
controlled by it, or which owns or controls it, and each partnership or 
venture to which any of them is a party, and each officer, director, 
employee, attorney, agent, or other person acting for or on behalf of 
any of them.
    D. ``Sabreliner's Transient Fuel Service Business'' means the 
following assets, owned or controlled by Sabreliner, that are or have 
been used at Lambert Field to provide fuel and other services to 
general aviation customers:
    1. 5,000 square feet of ramp space located west of Hangar 6;
    2. Office space (with associated office equipment), which includes 
pilot's lounge/flight planning room and access to lobby area, 
restrooms, conference facilities and canteen;
    3. Space on the north side of Hangar 6 sufficient to park any 
fueling trucks required by the purchaser; and
    4. Non-discriminatory access to the Fuel Delivery Cabinet on the 
west end of Sabreliner's fuel farm, the right to draw from Sabreliner's 
jet fuel tanks at least 2500 gallons of jet fuel per day, and the right 
to purchase that jet fuel directly from the fuel supplier from whom 
Sabreliner obtains its fuel.
    E. ``Sabreliner's Cargo and General Aviation Business'' means the 
following assets, owned or controlled by Sabreliner, that are or have 
been used at Lambert Field to provide fuel and other services to 
general aviation and based cargo customers:
    1. Sabreliner's entire leasehold interest in its tank farm, and all 
improvements and assets used in the business, including five fuel 
tanks, truck loading cabinet, and associated equipment;
    2. All rolling stock, including the fuel trucks, deicing vehicle, 
ramp tugs, auxiliary power unit and courtesy van;
    3. Office space (with associated office equipment), including 
pilot's lounge/flight planning room and access to lobby area, 
restrooms, conference facilities and canteen; and
    4. The entire ramp area around the west of hangers 6 and 7, 
comprising approximately eleven (11) acres, subject to access easements 
of any subtenants in Hangers 6 and 7.
    F. ``Person'' means any natural person, corporation, association, 
firm, partnership, or other business or legal entity.
    G. ``Lambert Field'' means Lambert St. Louis International Airport.

III

Applicability

    A. The provisions of this Final Judgment shall apply to the 
defendant, to defendant's successors and assigns, to defendant's 
subsidiaries, affiliates, directors, officers, managers, agents, and 
employees, and to all other persons in active concert or participation 
with any of them who shall have received actual notice of this Final 
Judgment by personal service or otherwise.
    B. The provisions of Sections IV through VIII of this Final 
Judgment shall be applicable only upon the consummation of the 
acquisition of Midcoast by Sabreliner.
    C. Defendant shall require, as a condition of the sale or other 
disposition of all or substantially all of their assets or stock, or of 
the assets required to be divested herein, that the acquiring party 
agree to be bound by the provisions of this Final Judgment.
    D. Nothing herein shall suggest that any portion of this Final 
Judgment is or has been created for the benefit of any third party, and 
nothing herein shall be construed to provide any rights to any third 
party.

IV

Divestiture of Sabreliner's Transient Fuel Business

    A. Defendant is hereby ordered and directed to divest, to an 
eligible purchaser, all of its direct and indirect ownership and 
control of Sabreliner's Transient Fuel Business or Sabreliner's Cargo 
and General Aviation Business. Nothing contained herein shall preclude 
Sabreliner from dealing with or contracting for services from the 
divested entity in the ordinary course of business.
    B. Divestiture of Sabreliner's leasehold interest in any of the 
assets of Sabreliner's Transient Fuel Service [[Page 9401]] Business or 
Sabreliner's Cargo and General Aviation Business may be by transfer of 
the entire leasehold interest or by sublease. If divestiture of any or 
all of the assets is by sublease, each such sublease shall be for the 
entire term of Sabreliner's lease, including the same rights for 
renewal Sabreliner has, and the sublease shall specify, for the entire 
period of the sublease:
    1. The price, or a formula for computing the price, for each and 
every payment due from the purchaser to Sabreliner pursuant to the 
sublease, including rent, and any uplift or other service charge for 
the use of Sabreliner's fuel tanks; and
    2. The terms and conditions under which Sabreliner may evict the 
purchaser or exercise any other rights for breach of the sublease; and
    3. That the airport authority must specifically approve any action 
by Sabreliner to exercise any rights under the sublease against the 
purchaser, unless such approval is arbitrarily and unreasonably 
withheld in the event of a breach of the sublease by the purchaser, in 
which case defendant must give a minimum of thirty (30) days notice to 
plaintiff prior to exercising any rights against the purchaser.
    C. If defendant has not accomplished the required divestiture prior 
to May 1, 1995, plaintiff may, if its sole discretion, extend this time 
period for an additional period of time not to exceed two months.
    D. Defendant agrees to take all reasonable steps to accomplish 
quickly said divestiture. In carrying out its obligation to divest the 
Sabreliner's Transient Fuel Business, defendant may divest these 
operations alone, or may divest along with these operations any other 
assets of Sabreliner.
    E. In accomplishing the divestiture ordered by this Final Judgment, 
the defendant promptly shall make known in the United States and in 
other major countries, by usual and customary means, the availability 
of Sabreliner's Transient Fuel Business for sale as an ongoing 
business. The defendant shall notify any person making an inquiry 
regarding the possible purchase of this operation that the sale is 
being made pursuant to this Final Judgment and provide such person with 
a copy of the Final Judgment. The defendant shall also offer to furnish 
to all bona fide prospective purchasers of Sabreliner's Transient Fuel 
Business, subject to customary confidentiality assurances, all 
pertinent information regarding Sabreliner's Cargo and General Aviation 
Business, including Sabreliner's Transient Fuel Business except such 
information subject to attorney-client privilege or attorney work 
product privilege. Defendant shall make available such information to 
the plaintiff at the same time that such information is made available 
to any other person. Defendant shall permit prospective purchasers of 
Sabreliner's Transient Fuel Business to have access to personnel at 
Sabreliner's Cargo and General Aviation Business, including 
Sabreliner's Transient Fuel Business, and to make such inspection of 
physical facilities and any and all financial, operational, or other 
documents and information as may be relevant to the sale required by 
this Final Judgment.
    F. Unless the plaintiff otherwise consents, divestiture under 
Section IV.A., or by the trustee appointed pursuant to Section V, shall 
be accomplished in such a way as to satisfy plaintiff, in its sole 
discretion, that Sabreliner's Transient Fuel Business or Sabreliner's 
Cargo and General Aviation Business can and will be operated by the 
purchaser as a viable, ongoing business engaged in the provision of 
fuel and other services to general aviation and cargo customers at 
Lambert Field. Divestiture shall be made to a purchaser for whom it is 
demonstrated to plaintiff's satisfaction that (1) the purchase is for 
the purpose of competing effectively in the provision of fuel and other 
services to general aviation customers at Lambert Field; (2) the 
purchaser has the managerial, operational, and financial capability to 
compete effectively in the provision of fuel and other services to 
general aviation customers at Lambert Field; and (3) none of the terms 
of any sublease between the purchaser and Sabreliner give Sabreliner 
the ability artificially to raise the purchaser's costs, lower the 
purchaser's efficiency, or otherwise interfere in the ability of the 
purchaser to provide fuel and other services to general aviation 
customers at Lambert Field. If the divestiture is of Sabreliner's 
Transient Fuel Business, it must be demonstrated to plaintiff's 
satisfaction that the purchaser can operate a transient fueling 
business on a stand-alone basis with costs and efficiency comparable to 
those achieved by Sabreliner's current integrated general aviation and 
cargo business.
    G. Except to the extent otherwise approved by plaintiff, any assets 
divested pursuant to this Final Judgment shall be divested free and 
clear of all mortgages, encumbrances and liens to Sabreliner or TWA.

V

Appointment of Trustee

    A. If defendant has not accomplished the divestiture required by 
Section IV of the Final Judgment by March 15, 1995, defendant shall 
notify plaintiff of that fact. Within ten (10) days of that date, or 
twenty (20) days prior to the expiration of any extension granted 
pursuant to Section IV(B), whichever is later, plaintiff shall provide 
defendant with written notice of the names and qualifications of not 
more than two (2) nominees for the position of trustee for the required 
divestiture. Defendant shall notify plaintiff within ten (10) days 
thereafter whether either or both of such nominees are acceptable. If 
either or both of such nominees are acceptable to defendant, plaintiff 
shall notify the Court of the person upon whom the parties have agreed 
and the Court shall appoint that person as the trustee. If neither of 
such nominees is acceptable to defendant, they shall furnish to 
plaintiff, within ten (10) days after plaintiff provides the names of 
its nominees, written notice of the names and qualifications of not 
more than two (2) nominees for the position of trustee for the required 
divestiture. If either or both of such nominees are acceptable to 
plaintiff, plaintiff shall notify the Court of the person upon whom the 
parties have agreed and the Court shall appoint that person as the 
trustee. If neither of such nominees is acceptable to plaintiff, it 
shall furnish the Court the names and qualifications of its proposed 
nominees and the names and qualifications of the nominees proposed by 
defendant. The Court may hear the parties as to the qualifications of 
the nominees and shall appoint one of the nominees as the trustee.
    B. If defendant has not accomplished the divestiture required by 
Section IV of this Final Judgment at the expiration of the time period 
specified in Section IV(C),the appointment by the Court of the trustee 
shall become effective. The trustee shall then take steps to effect 
divestiture of Sabreliner's Transient Fuel Service Business. The 
trustee shall have the right, in its sole discretion, to include in the 
package of assets to be divested any or all of the assets of 
Sabreliner's Cargo and General Aviation Business.
    C. After the trustee's appointment has become effective, only the 
trustee shall have the right to sell Sabreliner's Transient Fuel 
Service Business and Sabreliner's General Aviation and Cargo Business. 
The trustee shall have the power and authority to accomplish the 
divestiture to a purchaser acceptable to plaintiff at such price and on 
such terms [[Page 9402]] as are then obtainable upon a reasonable 
effort by the trustee, subject to the provisions of Section VIII of 
this Final Judgment, and shall have such other powers as this Court 
shall deem appropriate. Defendant shall not object to a sale of 
Sabreliner's Transient Fuel Service Business or any or all Sabreliner's 
Cargo and General Aviation Business by the trustee on any grounds other 
than the trustee's malfeasance. Any such objection by defendant must be 
conveyed in writing to plaintiff and the trustee within fifteen (15) 
days after the trustee has notified defendant of the proposed sale in 
accordance with Section VIII of this Final Judgment.
    D. The trustee shall serve at the cost and expense of defendant, 
shall receive compensation based on a fee arrangement providing an 
incentive based on the price and terms of the divestiture and the speed 
with which it is accomplished, and shall serve on such other terms and 
conditions as the Court may prescribe; provided, however, that the 
trustee shall receive no compensation, nor incur any costs or expenses, 
prior to the effective date of his or her appointment. The trustee 
shall account for all monies derived from a sale of Sabreliner's Cargo 
and General Aviation Business and all costs and expenses incurred in 
connection therewith. After approval by the Court of the trustee's 
accounting, including fees for its services, all remaining monies shall 
be paid to defendant and the trust shall then be terminated.
    E. Defendant shall take no action to interfere with or impede the 
trustee's accomplishment of the divestiture of Sabreliner's Transient 
Fuel Service Business or any or all of Sabreliner's Cargo and General 
Aviation Business and shall use its best efforts to assist the trustee 
in accomplishing the required divestiture. The trustee shall have full 
and complete access to the personnel, books, records, and facilities of 
Sabreliner's overall business, and defendant shall develop such 
financial or other information relevant to Sabreliner's Cargo and 
General Aviation Business.
    F. After its appointment becomes effective, the trustee shall file 
monthly reports with the parties and the Court setting forth the 
trustee's efforts to accomplish divestiture of Sabreliner's Transient 
Fuel Service Business or any or all of Sabreliner's Cargo and General 
Aviation Business as contemplated under this Final Judgment; provided, 
however, that to the extent such reports contain information that the 
trustee deems confidential, such reports shall not be filed in the 
public docket of the Court. Such reports shall include the name, 
address, and telephone number of each person who, during the preceding 
thirty (30) days, made an offer to acquire, expressed an interest in 
acquiring, entered into negotiations to acquire, or was contacted or 
made an inquiry about acquiring, any ownership interest in Sabreliner's 
Cargo and General Aviation Business, and shall describe in detail each 
contact with any such person during that period. The trustee shall 
maintain full records of all efforts made to divest these operations.
    G. Within six months after its appointment has become effective, if 
the trustee has not accomplished the divestiture required by Section VI 
of this Final Judgment, the trustee shall promptly file with the Court 
a report setting forth (1) the trustee's efforts to accomplish the 
required divestiture, (2) the reasons, in the trustee's judgment, why 
the required divestiture has not been accomplished, and (3) the 
trustee's recommendations; provided, however, that to the extent such 
reports contain information that the trustee deems confidential, such 
reports shall not be filed in the public docket of the Court. The 
trustee shall at the same time furnish such report to the parties, who 
shall each have the right to be heard and to make additional 
recommendations consistent with the purpose of the trust. The Court 
shall thereafter enter such orders as it shall deem appropriate in 
order to carry out the purpose of the trust, which shall, if necessary, 
include augmenting the assets to be divested, and extending the trust 
and the term of the trustee's appointment.

VI

Notification

    Immediately following entry of a binding contract, contingent upon 
compliance with the terms of this Final Judgment, to effect any 
proposed divestiture pursuant to Sections IV or V of this Final 
Judgment, defendant or the trustee, whichever is then responsible for 
effecting the divestiture, shall notify plaintiff of the proposed 
divestiture. If the trustee is responsible, it shall similarly notify 
defendant. The notice shall set forth the details of the proposed 
transaction and list the name, address, and telephone number of each 
person not previously identified who offered to, or expressed an 
interest in or desire to, acquire any ownership interest in the 
business that is the subject of the binding contract, together with 
full details of same. Within fifteen (15) days of receipt by plaintiff 
of such notice, plaintiff may request additional information concerning 
the proposed divestiture and the proposed purchaser. Defendant and/or 
the trustee shall furnish any additional information requested within 
twenty (20) days of the receipt of the request, unless the parties 
shall otherwise agree. Within thirty (30) days after receipt of the 
notice or within twenty (20) days after plaintiff has been provided the 
additional information requested (including any additional information 
requested of persons other than defendant or the trustee), whichever is 
later, plaintiff shall provide written notice to defendant and the 
trustee, if there is one, stating whether or not it objects to the 
proposed divestiture. If plaintiff provides written notice to defendant 
and/or the trustee that it does not object, then the divestiture may be 
consummated, subject only to defendant's limited right to object to the 
sale under the provisions in Sections VI(C). Absent written notice that 
the plaintiff does not object to the proposed purchaser, a divestiture 
proposed under Section IV shall not be consummated. Upon objection by 
plaintiff, a divestiture proposed under Section V shall not be 
consummated. Upon objection by plaintiff, or by defendant under the 
priviso in Sections VI(C), a divestiture proposed under Section V shall 
not be consummated unless approved by the Court.
VII

Affidavits

    Upon filing of this Final Judgment and every thirty (30) days 
thereafter until the divestiture has been completed or authority to 
effect divestiture passes to the trustee pursuant to Section V of this 
Final Judgment, defendant shall deliver to plaintiff an affidavit as to 
the fact and manner of compliance with Sections IV and V of this Final 
Judgment. Each such affidavit shall include the name, address, and 
telephone number of each person who, at any time after the period 
covered by the last such report, made an offer to acquire, expressed an 
interest in acquiring, entered into negotiations to acquire, or was 
contacted or made an inquiry about acquiring, any ownership interest in 
Sabreliner's Transient Fuel Business or Sabreliner's Cargo and General 
Aviation Business, and shall describe in detail each contact with any 
such person during that period. Defendant shall maintain full records 
of all efforts made to divest these operations.

VIII

Financing

    With prior consent of the plaintiff, defendant may finance all or 
any part of [[Page 9403]] any purchase made pursuant to Sections IV or 
V of this Final Judgment.

IX

Preservation of Assets

    Until the divestitures required by the Final Judgment have been 
accomplished:
    A. Defendant shall take all steps necessary to assure that 
Sabreliner's Cargo and General Aviation Business will be maintained as 
separate and independent economically viable, ongoing businesses with 
Midcoast's assets required for the provision of Midcoast's transient 
fuel services (including leaseholds, contracts, management, operations, 
and books and records) separate, distinct and apart from those of 
Sabreliner. The defendant shall use all reasonable efforts on behalf of 
Sabreliners's Cargo and General Aviation Business to maintain and 
increase sales of transient fuel and other services to general aviation 
customers at Lambert Field, and otherwise maintain the business as a 
viable and active competitor at Lambert Field.
    B. The defendant shall not sell, lease, assign, transfer or 
otherwise dispose of, or pledge as collateral for loans (except such 
loans as are currently outstanding or replacements of substitutes 
therefore), assets required to be divested pursuant to Sections IV or V 
except that any component of such assets as is replaced in the ordinary 
course of business with a newly purchased component may be sold or 
otherwise disposed of, provided the newly purchased component is so 
identified as a replacement component for one to be divested.
    C. The defendant shall provide capital and provide and maintain 
sufficient working capital to maintain Sabreliner's Cargo and General 
Aviation Business, as viable, ongoing businesses consistent with the 
requirements of Section IX(A).
    D. The defendant shall preserve the assets required to be divested 
pursuant to Section IV and V, except those replaced with newly acquired 
assets in the ordinary course of business, in a state of repair equal 
to their state of repair as of the date of this Final Judgment, 
ordinary wear and tear excepted. Defendant shall preserve the 
documents, books and records of Midcoast until the date of divestiture 
of Sabreliner' Transient Fuel Business and shall preserve the 
documents, books and records of Sabreliner's Cargo and General Aviation 
Business until the date of divesture of that business.
    E. Except in the ordinary course of business, or as is otherwise 
consistent with the requirements of Section IX, the defendant shall 
refrain from terminating or altering one or more current employment, 
salary, or benefit agreements for one or more executive, managerial, 
sales, marketing, engineering, or other technical personnel of 
Sabreliner's Cargo and General Aviation Business, including its 
Transient Fuel Business, and shall refrain from transferring any 
employee so employed without the prior approval of plaintiff.
    F. Defendant shall refrain from taking any action that would 
jeopardize the sale of Sabreliner's Cargo and General Aviation 
Business.

X

Compliance Inspection

    For the purposes of determining or securing compliance with the 
Final Judgment and subject to any legally recognized privilege, from 
time to time:
    A. Duly authorized representatives of the Department of Justice 
shall, upon written request of the Attorney General or of the Assistant 
Attorney General in charge of the Antitrust Division, and on reasonable 
notice to defendant made to its principal office, be permitted:
    1. Access during office hours of such defendant to inspect and copy 
all books, ledgers, accounts, correspondence, memoranda, and other 
records and documents in the possession or under the control of such 
defendant, who may have counsel present, relating to any matters 
contained in this Final Judgment; and
    2. Subject to the reasonable convenience of such defendant and 
without restraint or interference from it, to interview officers, 
employees, and agents of such defendant, who may have counsel present, 
regarding any such matters.
    B. Upon the written request of the Attorney General or of the 
Assistant Attorney General in charge of the Antitrust Division made to 
defendant's principal office, such defendant shall submit such written 
reports, under oath if requested, with respect to any of the matters 
contained in this Final Judgment as may be requested.
    C. No information or documents obtained by the means provided in 
this Section X shall be divulged by a representative of the Department 
of Justice to any person other than a duly authorized representative of 
the Executive Branch of the United States, except in the course of 
legal proceedings to which the United States is a party (including 
grand jury proceedings), or for the purpose of securing compliance with 
this Final Judgment, or as otherwise required by law.
    D. If at the time information or documents are furnished by 
defendant to plaintiff, defendant represents and identifies in writing 
the material in any such information or documents to which a claim of 
protection may be asserted under rule 26(c)(7) of the Federal Rules of 
Civil Procedure, and defendant marks each pertinent page of such 
material, ``Subject to claim of protection under Rule 26(c)(7) of the 
Federal Rules of Civil Procedure,'' then ten (10) days notice shall be 
given by plaintiff to defendant prior to divulging such material in any 
legal proceeding (other than a grand jury proceeding).
XI

Retention of Jurisdiction

    Jurisdiction is retained by this Court for the purpose of enabling 
any of the parties to this Final Judgment to apply to this Court at any 
time for such further orders and directions as may be necessary or 
appropriate for the construction or carrying out of this Final 
Judgment, for the modification of any of the provisions hereof, for the 
enforcement of compliance herewith, and for the punishment of any 
violations hereof.

XII

Termination

    This Final Judgment will expire on the tenth anniversary of the 
date of its entry.

XIII

Public Interest

    Entry of this Final Judgment is in the public interest.

    Dated:
----------------------------------------------------------------------
United States District Judge

Competitive Impact Statement

    United States of America, Plaintiff, v. Sabreliner Corporation, 
Defendant.

Case Number 1:95CV00241
Judge: Stanley Sporkin
Deck Type: Antitrust
Date Stamp: 02/06/95

    Pursuant to Section 2(b) of the Antitrust Procedures and Penalties 
Act (``APPA''), 15 U.S.C. (b)-(h), the United States of America files 
this Competitive Impact Statement relating to the proposed Final 
Judgment submitted for entry with the consent of Sabreliner Corporation 
in this civil antitrust proceeding.

I

Nature and Purpose of the Proceeding

    On February 6, 1995, the United States filed a Complaint alleging 
that the [[Page 9404]] acquisition of Midcoast Aviation, Inc. 
(hereinafter ``Midcoast'') by Sabreliner Corporation, (hereinafter 
``Sabreliner'') was a violation of Section 7 of the Clayton Act (15 
U.S.C. 18). The Complaint alleges that the effect of the merger may be 
substantially to lessen competition for the sale of jet fuel by fixed 
base operators (``FBOs'') to general aviation aircraft at St. Louis-
Lambert International Airport. Sabreliner and Midcoast are the only two 
providers of jet fuel for transient general aviation customers at 
Lambert Field.
    On February 6, 1995, the United States and defendant also filed a 
Stipulation by which they consented to the entry of a proposed Final 
Judgment designed to eliminate the anticompetitive effects of the 
merger. Under the proposed Final Judgment, as explained more fully 
below, Sabreliner would be required to sell or assign, by May 1, 1995, 
certain assets and leasehold interests. If it should fail to do so, a 
trustee appointed by the Court would be empowered to divest these 
assets.
    The United States and Sabreliner have agreed that the proposed 
Final Judgment may be entered after compliance with the APPA. Entry of 
the proposed Final Judgment will terminate the action, except that the 
Court will retain jurisdiction to construe, modify and enforce the 
Final Judgment, and to punish violations of the Final Judgment.

II

Events Giving Rise to the Alleged Violation

    On November 2, 1994, Sabreliner, Midcoast, and Trans World 
Airlines, Inc. (the parent of Midcoast) entered into an agreement under 
which Sabreliner would acquire all of the stock of Midcoast for 
approximately $7.2 million.
    Sabreliner, engaged primarily in the business of repairing and 
overhauling jet aircraft, also operates a FBO service at Lambert Field 
in St. Louis. Sabreliner's total revenues for fiscal 1994 were over 
$100 million.
    Midcoast has FBO facilities at Adams Field in Little Rock, AK, Bi-
State Parks in Cahokia, IL, and St. Louis-Lambert in St. Louis, MO. 
From these facilities, Midcoast performs repairs, maintenance, and 
overhauls in addition to other FBO services, including jet fueling. 
Midcoast had revenues of $41 million in 1993.
    FBOs provide aircraft terminaling services to general aviation 
aircraft customers, typically charter operators or other private 
operators that provide transportation for business executives. These 
services principally involve aircraft fueling services and maintenance 
services, such as aircraft cleaning and de-icing, and also the 
provision of such facilities as lounges for passengers and flight 
crews, ground transportation, and canteens. Last year, general aviation 
customers purchased around $1 billion of jet fuel from FBOs nationwide.
    General aviation customers flying into airports other than the 
airport where they are based are called ``transients.'' If transient 
general aviation customers need to purchase fuel away from home, they 
must purchase fuel from an FBO.
    Pilots of corporate and charter jets select the airports to which 
they will fly based on where their passengers need to go, or where 
their passengers need to be picked up. The pilots will then choose then 
FBO at that airport offering the most favorable combination of fuel 
prices and services. There are no alternative sources to which the 
pilots would switch to obtain jet fuel if the FBOs raise prices.
    Although Lambert Field is one of several airports in the St. Louis 
area servicing general aviation aircraft, Lambert is the only airport 
in St. Louis that provides commercial scheduled domestic and 
international service. In addition, Lambert offers close proximity to 
downtown St. Louis. Both of these features make Lambert attractive to 
general aviation passengers.
    Because of the large volume of commercial traffic served by 
Lambert, however, the airport is frequently very congested. To avoid 
this congestion, general aviation pilots prefer to use other airports 
in the St. Louis area, which accommodate primarily general aviation 
traffic. General aviation aircraft usually will fly into Lambert only 
if it is necessary to satisfy a passenger's travel requirements. Those 
pilots that select Lambert as their destination airport, therefore, are 
not likely to change their flight plan to obtain lower fuel prices at 
other airports.
    The Complaint alleges that the sale of jet fuel to transient 
general aviation customers is a relevant product market for antitrust 
purposes. The Complaint further alleges that Lambert-St. Louis 
International Airport is a relevant geographic market within the 
meaning of Section 7 of the Clayton Act. The Complaint refers to the 
relevant market as the ``Lambert transient general aviation jet fuel 
market.''
    Sabreliner and Midcoast have been the only two FBOs providing, and 
capable of providing in the future, fueling services to general 
aviation aircraft at Lambert Field. Based on jet fuel sales revenue, 
Sabreliner has 15% of that market and Midcoast has 85%. Transient 
general aviation customers have benefited from competition between 
these two firms, receiving lower jet fuel prices and improved FBO 
services. As a result of its acquisition of Midcoast, Sabreliner now 
has a monopoly of the Lambert transient general aviation jet fuel 
market, which, absent relief, will likely cause general aviation 
customers to pay higher prices for jet fuel and received diminished 
services.
    The St. Louis Airport Authority has committed to expanding the 
amount of space available at Lambert for scheduled commercial traffic 
and is unlikely to allocate more space to accommodate another FBO in 
the near future. Therefore, an increase in the price of jet fuel to 
transient general aviation customers will not be defeated by a new 
entrant.

III

Explanation of The Proposed Final Judgment

    The United States brought this action because the effect of the 
acquisition of Midcoast by Sabreliner may be substantially to lessen 
competition, in violation of Section 7 of the Clayton Act, in the 
Lambert transient general aviation jet fuel market. The risk to 
competition posed by this acquisition, however, would be eliminated if 
the assets and leases currently held by Sabreliner to operate its 
Lambert transient general aviation fueling business were sold and 
assigned to a purchaser that could operate them as an active, 
independent and financially viable competitor. To this end, the 
provisions of the proposed Final Judgment are designed to accomplish 
the sale and assignment of certain assets and leaseholds to such a 
purchaser and thereby prevent the anticompetitive effects of the 
proposed acquisition.
    Section IV of the proposed Final Judgment requires defendant 
Sabreliner, by May 1, 1995, to divest either its Transient Fuel Service 
Business as defined in Section II. D, or its Cargo and General Aviation 
Business, as defined in Section II. E of the proposed Final Judgment. 
Divestiture of one of the two groups of assets and leaseholds will cure 
the potential anticompetitive consequences of Sabreliner's acquisition 
of Midcoast.
    The first group, Sabreliner's Transient General Aviation Business, 
includes the assets and leases a prospective purchaser would need to 
effectively operate a stand-alone transient general aviation fueling 
business. Should a purchaser elect to acquire and operate 
[[Page 9405]] these assets, the competition lost through Sabreliner's 
acquisition of Midcoast would be restored. However, Sabreliner's 
current revenue stream from its transient general aviation fueling 
business may be too small to attract, or viably support, a satisfactory 
purchaser. Accordingly, the second group, Cargo and General Aviation 
Business, is a broader package that includes assets that Sabreliner 
currently operates to provide fuel and other services to both cargo and 
general aviation aircraft at Lambert Field.
    Under the proposed Final Judgment, Sabreliner must take all 
reasonable steps necessary to accomplish quickly the divestiture of one 
of the two specified groups of assets, and shall cooperate with bona 
fide prospective purchasers by supplying all information relevant to 
the proposed sale. Should Sabreliner fail to complete its divestiture 
by May 1, 1995, the Court will appoint, pursuant to Section V, a 
trustee to accomplish the divestiture. The United States will have the 
discretion to delay the appointment of the trustee for up to an 
additional two months should it appear that the assets can be sold in 
the extended time period.
    Following the trustee's appointment, only the trustee will have the 
right to sell the divestiture assets, and defendant Sabreliner will be 
required to pay for all of the trustee's sale-related expenses. It will 
be in the sole discretion of the trustee to sell either package of 
assets, or any combination of those assets, necessary to accomplish a 
timely divestiture of Sabreliner's Transient Fuel Service Business.
    Section VI of the proposed Final Judgment would assure the United 
States an opportunity to review any proposed sale, whether by 
Sabreliner or by the trustee, before it occurs. Under this provision, 
the United States is entitled to receive complete information regarding 
any proposed sale or any prospective purchaser prior to consummation. 
Upon objection by the United States to a sale of the divestiture assets 
by the defendant Sabreliner, a proposed divestiture may not be 
completed. Should the United States object to a sale of the divested 
assets by the trustee, that sale shall not be consummated unless 
approved by the Court.
    Pursuant to Section V.G., should the trustee not accomplish the 
divestiture within six months of appointment, the trustee and the 
parties will make recommendations to the Court, which shall enter such 
orders as it deems appropriate to carry out the purpose of the trust, 
which may include extending the trust or the term of the trustee's 
appointment.
    Under Section IX of the proposed Final Judgment, defendant 
Sabreliner must take certain steps to ensure that, until the required 
divestiture has been completed, the divestiture assets--Sabreliner's 
cargo and general aviation business--will be maintained as a separate, 
ongoing, viable business and kept distinct from Midcoast's assets and 
facilities at Lambert. Until such divestiture, Sabreliner must also 
continue to maintain and operate the business as a viable, independent 
competitor at Lambert Field, using all reasonable efforts to maintain 
and increase transient fuel sales. Sabreliner must maintain the 
business, so that it continues to be salable, including maintaining all 
records, loans, and personnel necessary for its operation.
    Section X requires the defendant to make available, upon request, 
the business records and the personnel of its business. This provision 
allows the United States to inspect and ensure that the defendant is 
complying with the requirements of the proposed Final Judgment. Section 
XII of the proposed Final Judgment provides that it will expire on the 
tenth anniversary of its entry by the Court.

IV

Remedies Available to Potential Private Litigants

    Section 4 of the Clayton Act (15 U.S.C. 15) provides that any 
person who has been injured as a result of conduct prohibited by the 
antitrust laws may bring suit in federal court to recover three times 
the damages the person has suffered, as well as costs and reasonable 
attorneys' fees. Entry of the proposed Final Judgment will neither 
impair nor assist the bringing of any private antitrust damage action. 
Under the provisions of Section 5(a) of the Clayton Act (15 U.S.C. 
16(a)), the proposed Final Judgment has no prima facie effect in any 
subsequent private lawsuit that may be brought against the defendant.

V

Procedure for Commenting on the Proposed Final Judgment

    The United States and defendant have stipulated that the proposed 
Final Judgment may be entered by the Court after compliance with the 
provisions of the APPA, provided that the United States has not 
withdrawn its consent. The APPA conditions entry upon the Court's 
determination that the proposed Final Judgment is in the public 
interest.
    The APPA provides a period of at least 60 days preceding the 
effective date of the proposed Final Judgment within which any person 
may submit to the United States written comments regarding the proposed 
Final Judgment. Any person who wishes to comment should do so within 60 
days of the date of publication of this Competitive Impact Statement in 
the Federal Register. The United States will evaluate the comments, 
determine whether it should withdraw its consent, and respond to 
comments. The comments and the response of the United States will be 
filed with the Court and published in the Federal Register.
    Written comments should be submitted to: Roger W. Fones, Chief, 
Transportation, Energy & Agriculture Section, Antitrust Division, 
Judiciary Center Building, 555 4th Street, N.W., Room 9104, Washington, 
DC 20001.

VI

Altneratives to the Proposed Final Judgment

    The proposed Final Judgment requires that the divestiture assets be 
sold to a purchaser with the capability and present intent of operating 
them as part of a viable, ongoing business capable of providing 
transient general aviation fueling services at Lambert Field. Thus, 
compliance with the proposed Final Judgment and the completion of the 
sale required by the Judgment should resolve the competitive concerns 
raised by the acquisition.
    Litigation is, of course, always an alternative to a consent decree 
in a Section 7 case. The United States rejected this alternative 
because the sale required under the proposed Final Judgment should 
prevent the acquisition by Sabreliner of Midcoast from having a 
significant anticompetitive effect in the relevant market alleged.
    The United States is satisfied that the proposed Final Judgment 
fully resolves the anticompetitive effects of the proposed merger 
alleged in the Complaint. Although the proposed Final Judgment may not 
be entered until the criteria established by the APPA (15 U.S.C. 
16(b)(-(h)) have been satisfied, the public will benefit immediately 
from the safeguards in the proposed Final Judgment because the 
defendant has stipulated to comply with the terms of the Judgment 
pending its entry by the Court.

VII

Determinative Materials and Documents

    There are no materials or documents that the United States 
considered to be determinative in formulating this proposed Final 
Judgment. Accordingly, [[Page 9406]] none are being filed with this 
Competitive Impact Statement.

    Dated: February 6, 1995.

    Respectfully submitted.
Roger W. Fones,
Chief.
Donna N. Kooperstein,
Assistant Chief.
Jonathan D. Lee,
Attorney.

Certificate of Service

    I hereby certify that I am an attorney for the United States in 
this action, and have caused a true and correct copy of the foregoing 
Complaint, Stipulation, proposed Final Judgment, and Competitive Impact 
Statement, to be served by first class mail and February 6, 1995 for 
the defendant at the address below:
John Gillick,
Winthrop, Stimson, Putnam & Roberts.
    For defendant Sabreliner Corporation.
Jonathan D. Lee,
Attorney in Charge.
[FR Doc. 95-3889 Filed 2-16-95; 8:45 am]
BILLING CODE 4410-01-M