Less than a month before Northwest Airlines Corp. filed for bankruptcy, its chairman sold nearly a third of his remaining shares.
The trading, disclosed in regulatory filings Monday, marks another wave of share sales by Gary Wilson.
Northwest's stock price, which closed at 84 cents Monday, was worth more than $5 when Wilson sold 258,100 shares of his 904,940 shares in the Eagan, Minn.-based airline.
Northwest spokesman Bill Mellon said the sales were a "personal decision by Mr. Wilson."
Wilson has been selling his stock since the spring. At the beginning of May, Wilson owned 4.3 million shares. That dwindled to 1.3 million by mid June, and as of the last filing Aug. 25, stood at 646,840 shares.
Between Aug. 18 and 25, Wilson sold his shares at prices ranging from $5.07 to $5.84. Taking the average of those two prices of $5.45, Wilson stands to gain a pretax take of $1.4 million by selling those shares.
Northwest's shares, which now trade under the symbol NWACQ, are slated to be delisted on the Nasdaq market and trade over the counter Monday.
Separately, the airline disclosed the attorneys it has hired and the legal fees it is slated to pay during its bankruptcy and restructuring.
Michigan's most important airline, Northwest carries more than 60% of traffic at Detroit Metro Airport, and nearly 80% when counting its commuter carriers.
Northwest filed for Chapter 11 bankruptcy protection Wednesday, ending months of speculation that high jet fuel prices and few concessions from its unions would lead the financially troubled carrier to bankruptcy court.
Northwest has hired 11 firms, including law firms and financial and restructuring consultants and advisers, to deal with issues such as antitrust, labor and pension law.
Its bankruptcy attorneys are from New York-based Cadwalader, Wickersham & Taft LLP. Northwest has paid the firm $5.6 million during the last year and its rates range from $140 an hour for legal assistants to $800 an hour for a partner's time.
Northwest hired Paul, Hastings, Janofsky & Walker LLP of Los Angeles to handle labor issues. The firm has been working with Northwest for 14 years. A court filing Wednesday notes that Northwest is "one of the most heavily unionized of the major U.S. air carriers," with 38,000 union employees.
Before filing for bankruptcy, the airline paid the firm an initial retainer of $400,000. Its rates range from $295 an hour for associates to $615 for the highest-paid partner working on the case.
Copyright 2005 Associated Press
Northwest reportedly used the threat of bankruptcy to pressure workers to take concessions.
Northwest's payments came when executives were using the threat of bankruptcy to pressure workers to take concessions.
Northwest shares fell 75 cents, or 11.9 percent, to close at $5.58 in Monday trading on the Nasdaq Stock Market, after falling as low as $5.05 earlier in the day.
Payment draws immediate court objections from unions who endured sharp pay cuts while the airline reorganized under bankruptcy protection.