Appendix — Hughes Tool Co. v. Trans World Airlines, Inc.

Supreme Court brief1973

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In THE

Supreme Court of the Anited States

Ocroser Term, 1972

Nos. 71-827, 71-830

Hvucues Toot Company and Rarmonp M. Hotimay,

Petitioners,

Trans: Wortp Arties, Inc.,

Respondent.

Trans Worip Araines, Inc.,

Cross-Petitioner,

—vV =<

E Hvones Toot Company and Raymon M. Hoiimay,

Respondents.

0 WRITS OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS

4 FOR THE SECOND CIRCUIT

INDEX

. Volume I

Li st of Relevant Docket Entries

EWA Complaint [Doe. 1]

v fer Referring This Action to Judge Metzner for

SAll Purposes, dated August 31, 1961 [Doe. 42] ....

Adi

Opinion and Order of December 5, 1961 [Doc. 50] ..

Pretrial Order, February 7, 1962 [Doe. 59] ............

Tooleo’s Answer and Counterclaims [Doc. 63) ........

Holliday’s Answer [Doc. 83]

Pretrial Order, July 12, 1962 [Doe. 101] .............

Pretrial Order, September 21, 1962 [Doe. 122] ........

Pretrial Order, January 10, 1963 [Doc. 144] .........

Pretrial Order, January 19, 1963 [Doe. 146] —........

Opinion and Order of Special Master dated January

22, 1968, Exhibit C to Bromley Affidavit dated

, February 15, 1963 [Doc. 179]

Exhibit A to the Affidavit of John F. Sonnett, dated

’ - February 1, 1963 [Doc. 166]

Exhibits B and C to the Affidavit of John F. Son-

nett, dated February 1, 1963 [Doc. 167] ............

Pretrial Order, February 1, 1963 [Doc. 168] ....

Opinion and Order, Fébruary 7, 1963 [Doc. 173] ....

Tooleo’s Notice of Position, dated February 8, 1963

[Doc. 174]

Transcript of Pretrial Hearing, February 8, 1963

[Doc. 188]

Transcript of Pretrial Hearing, May 2, 1963 [Doc.

204)

Opinion and Order, dated May 3, 1963 [Doc. 191] ....

Opinion and Order of May 3, 1963 Granting Addi-

tional Defendants’ Motion to Dismiss (memoran-

dum endorsed on motion papers dated February

15, 1963) [Doc. 179B] :

PAGE

A-35

A-36

A4l1

A-99

A-116

A-118

A-122

A-127

A-133

A-148

A-226

A-253

A-255

A-268

A-270

A-309

A-317

A-323

A-iii

Judgment of the Court of Appeals on Interlocutory

Appeal, Entered July 10, 1964 [Docket No. 28405]

[Doc. 478]

Judgment of the Court of Appeals Affirming

missal of the Counterclaims, Entered Tuly/

1964 [Docket No. 28406] [Doc. 479] ka

Opinion of the Court of Appeals in Dockets No.

28405 and No. 28406 [Doc. 478]

Opinion and Order of Special Master JéLee Rankin,

dated July 30, 1965 [Doc. 481]

Opinion and Order of Judge Metzner, dated Novem-

ber 16, 1965 [Doc. 487] 1

Transcript of Hearing Béfore Judge Metzner on

December 30, 1965 [Doc. 498]

Opinion and Order of Judge Metzner Denying De-

fendants’ Motion for a Pre-Hearing Order, dated

January 4, 1966 [Doec. 496]

Order by Judge Metzner of January 4, 1966 Desig-

nating Herbert Brownell as Special Master in

Place of J. Lee Rankin [Doc. 497]

Volume II

Excerpts from Testimony at Damage Hearing of

Robert W. Rummel [Does. 554-2 through 554-10]

Testimony at Damage Hearing of John B. Connelly

[Doc. 554-11]

Volume III

Excerpts from Testimony at Damage Hearing of

Edward J. Morehouse [Docs. 554-13, 554-14] .... A-

Excerpts from Testimony at Damage Hearing of

Edward Wemple [Docs. 554-15 through 554-18,

554-32]

PAGE

A-324

A-326

A-328

A-357

A-396

A-400

A-422

A-424

A-425

A-977

1209

A-1243

A-iv

PAGE

Excerpts from Testimony at Damage Hearing of

John C. Biegler [Doc. 554-19] A-1527

Volume IV

Excerpts from Testimony at Damage Hearing of

Gene M. Woodfin [ Does. 554-23, 554-24] 0.0... A-1567

Excerpts from Testimony at Damage Hearing of

Nathan S. Simat [Does. 554-25, -26, -27, -28, -30,

31) A-1575

Excerpts from Testimony at Damage Hearing of

L. John Eichner [Does. 554-31, -32] A-1727

Testimony at Damage Hearing of Van Court M.

Hare, Jr. [Doc. 554-32] A-1773

Excerpts from Pretrial Deposition of Robert W.

Rummel [Docs. 224, 225, 226] A-1797

Excerpts from Pretrial Deposition of Charles C.

Tillinghast (Docs. 210 through 222] .................... A-1850

Excerpts from Pretrial Deposition of Emmett 0.

Cocke [Does. 228, 231, 233, 235] A-1913

Jones v. Uris Sales Corp.—Master’s Report [not a

part of the Record herein] A-1934

Volume V .

Notice of Filing of Report of Special Master dated

September 21, 1968 [Doc. 509] A-1965

Report of Special Master, Filed September 21, 1968

[Doc. 508] A-1966

Defendants’ Objections to the Report of the Special

Master, dated November 1, 1968 [Doe. 511] ........ A-1967

Opinion and Order, Filed December 23, 1969, Adopt-

ing and Confirming the Report of the Special

Master [Dvoc. 519] A-2027

A-v

PAGE

Opinion and Order of April 18, 1970 Awardin

Attorney’s Fee and Costs [Doc. 530) .................... A-2060

Final Judgment Entered April 14, 1970 [Doc. 531] .. A-2073

, Volume VI

Tooleo’s Notice of Motion to Dismiss TWA’s Com-

plaint, August 8, 1961 [Doc. 22] ; A-2075

Order by Judge Herlands, dated August 14, 1961

(Doe. 25] A-2077

Transcript of Pretrial Hearing Before Judge Metz-

ner, September 6, 1961 [Doc. 47] A-2078

Pretrial Order of Judge Metzner, September 7, 1961

[Doc. 44] A-2112

Transcript of Pretrial Hearing Before Judge Metz-

ner, October 2, 1961 [Doc. 48] : A-2115

Pretrial Order of Judge Metzner, December 18, 1961

[Doc. 354] A-2138

Tooleo’s Notice of Motion Before Special Master

J. Lee Rankin, February 15, 1962 [Doe. 66] ........ A-2140

Transcript of Pretrial Hearing Before Judge Metz-

ner, February 23, 1962 [Doc. 79] A-2141

Orders of Special Master J. Lee Rankin, April 17,

1962, contained in excerpts from transcript of

deposition of Charles C. Tillinghast, Jr. [Doc.

217] A-2176

Interrogatory Propounded by TWA to Toolco, May

_ 4, 1962 (Doe. 89] A-2197

Interrogatory Propounded by TWA to Raymond M.

Holliday, May 4, 1962 [Doe. 90] A-2203

Transcript of Pretrial Hearing Before Judge Metz-

ner, May 17, 1962 [Doc. 96] A-2206

A-vi

PAGE

Portion of Transcript of Proceedings Before Spe-

cial Master J. Lee Rankin, June 4, 1962 [Doc.

218) A-2233

TWA’s Notice of Motion and Affidavit of John F.

Sonnett, June 25, 1962 [Doc. 305] A-2234

Affidavit of John B. Hupper, July 2, 1962 [Doc.

315) A-2240

Transcript of Pretrial Hearing Before Judge Metz-

ner, July 12, 1962 [Doc. 107] A-2245

Pretrial Order of Judge Metzner, July 23, 1962

[Doc. 103] A-2267

Pretrial Order of Judge Metzner, July 24, 1962

(Doc. 93] A-2268

of Pretrial Hearing Before Judge Metz-

ner, July 26, 1962 [Doc. 113] A-2270

Affidavit of Robert G. Zeller, August 28, 1962 with

Exhibits A-K [Doc. 110] A-2283

Memorandum Reviewing the History of TWA’s Ap-

plication for Permission to Propound an Inter-

rogatory of Hughes Tool Company Concerning

the Location of Howard R. Hughes, August 30,

1962 [Doe. 106] A-2297

Transcript of Pretrial Hearing Before Judge Metz-

ner, September 6, 1962 [Doc. 355] A-2305

Affidavit of John F. Sonnett, September 14, 1962,

and Exhibits C and D thereto [Doe. 117] ............ A-2316

Portions of Transcript of Proceedings Before Spe-

cial Master J. Lee Rankin, September 15, 1962

[Doc. 226] A-2382

Transcript of Pretrial Hearing Before Judge Metz-

ner, September 19, 1962 [Doc. 129] 7 A-2391

Portions of Transcript of Discovery Proceedings

-Before Special Master J. Lee Rankin, October 25,

1962 [Doc. 226] A-2428

A-vii

PAGE

Transcript of Pretrial Hearing Before Judge Metz-

ner, October 29, 1962 [Doc. 184] A-2438

Notice of Motion by Tooleo, December 4, 1962, for

Leave to Depose Sessel and Wadsworth [Doc.

338] . - A-2461

Transcript of Proceedings Before Special Master

J. Lee Rankin, December 14, 1962 [Doc. 237] .... A-2462

Transcript of Proceedings Before Special Master

J. Lee Rankin, December 28, 1962 [Doc. 237] .... A-2514

ript of Pretrial Hearing Before Judge Metz-

uary 9, 1963 [Doc. 185] A-2523

ipt of Proceedings Before Special Master

J. Lee Rankin, January 14, 1963 [Doe. 237] ........ A-2571

Notice of Motion by Toolco, January 14, 1963 [Doc.

145] A-2574

Transcript of Pretrial Hearing Before Judge Metz-

ner, January 17, 1963 [Doc. 186] A-2576

Notice of Motion by Toolco, January 22, 1963 [Doc.

147] A-2602

Transcript of Proceedings Before Special Master

J. Lee Rankin, January 23, 1963 [Doc. 237] ........ A-2603

Notice of Motion by Toolco, J anuary 25, 1963 [Doc.

152] A-2615

Transcript of Pretrial Hearing Before ‘J udge Metz-

ner, January 28, 1963 [Doc. 187] A-2616

Letter of Chester C. Davis to Judge-Metzner, Jan-

uary 29, 1963 [Doc. 448] .! A-2642

Letter of Chester C. Davis to Special Master J. Lee

Rankin, February 4, 1963 ‘[Doe. 458) 2... A-2645

Letter from John F. Sonnett to Chester C. Davis,

February 5, 1963 [Doc. 459] A-2647

A-viii

PAGE

Notice of Motion by Toolco, February 6, 1963 [Doc.

170] A-2648

Affidavit of Nazeeh Habashy, February 6, 1963 [Doc.

172] A-2649

Transcript of Pretrial Hearing Before Judge Metz-

ner, February 6, 1963 [Doc. 187] A-2650

Affidavit of Bruce Bromley, February 15, 1963

[without exhibits] [Doc. 179] A-2676

Affidavit of William C. Chanler, February 15, 1963

[Doe. 179] A-2689

Order to Show Cause dated February 16, 1963, and

Affidavit of John F. Sonnett, February 15, 1963

[Doc. 180] A-2692

Transcript of Pretrial Hearing Before Judge Metz-

ner, February 21, 1963 [Doc. 189] A-2704

Order of the Court of Appeals for the Second Cir-

cuit dated June 6, 1963, Granting Leave to Appeal

and Staying Damage Hearing Pending Appeal .. A-2736

Orders of the Supreme Court of the United States,

dated November 16, 1964 Granting Writs of Cer-

tiorari A-2737

Orders of the Supreme Court, dated March 8, 1965,

Dismissing the Writs of Certiorari as Improvi-

dently Granted in Hughes Tool Company et al. v.

Trans World Airlines, Inc., Nos. 443 and 501 .... A-2738

Opinion of the Court of Appeals dated September 1,

1971, in Docket Nos. 34902, 35114, Affirming with

Modifications the Judgment of the District

Court A-2739

Orders of the Court of Appeals, dated September

28, 1971, Denying Petitions for Rehearing and

Rehearing in banc A-2799

A-ix

Volume VII

PAGE

Excerpts from Transcript of Deposition of Charles —

C. Tillinghast, Jr. [Excerpts from Does. 54, 210,

211, 216, 221) A-2800

Vol. 11 of Defendants’ Exhibits to Deposition of

Charles C. Tillinghast, Jr. (consisting of Ex-

hibit 11, with subparts 11-A through 11-T, inclu-

sive) [Doc. 238] A-3220

Opinions and Orders of the Civil Aeronautics Board

with respect to-the Hughes Tool Company—TWA

Control Relationship, as follows:

(a) CAB Opinion and Order No. 3210, October

17, 1944 (officially reported at 6 C.A.B.

153) [not a part of the Record herein] .... A-3297

(b) CAB Order No. 4437, January 26, 1946 ... A-3307

(ce) CAB Order No. E-922, October 29, 1947 .... A-3309

(d) CAB Opinion and Order No. E-1735, June

30, 1948 (officially reported at 9 C.A.B.

381) [not a part of the Record herein] .... A-3311

(e) CAB Opinion and Order No. E-4701, Oc-

tober 6, 1950 (officially reported at 12

C.A.B. 192) [not a part of the Record

herein] . A-3333

(f) CAB Opinion and Order No. E-16195, De-

cember 29, 1960 (officially reported at 32

C.A.B. 1363) . A-3403

A-x

List of Relevant Docket Entries

In the District Court, June 1961-January 1963

Date Proceedings

June 30, 1961 Filed complaint and issued sum-

mons.

June 30, 1961 Filed order directing that issuance

of process, complaint and all other

papers filed herein be kept under

seal, ete.—MacMahon, J.

Filed affidavit and show cause order

—leave to plaintiff to take deposi-

tion of Howard R. Hughes—return-

able July 5, 1961. Marshal’s return

annexed—Served E. W. Hoeppner,

Sales Manager Hughes Tool Co.,

July 5, 1961.

Filed plaintiff's memorandum of

points and authorities in support of

motion pursuant to Rule 26(a)

FRCP.

July 31, 1961 Filed affidavit of Chester C. Davis

in support of application of Toolco

for adjournment of plaintiff’s mo-

tion (exhibits). :

August 2, 1961 Filed plaintiff’s notice to take depo-

: sition of Howard R. Hughes.

August 3, 1961 Filed plaintiff’s notice to take depo-

sition of Hughes Tool Co., etc.

August 3, 1961 Filed defendant Hughes Tool Co.’s

notice to take depositions of James

F. Oates, Jr. and Grant Keehn.

August 3, 1961 Filed defendant Hughes Tool Co.'s

notice to take deposition of Harry

C. Hagerty and Gordon P. Jenkins.

A-xi

List of Relevant Docket Entries

Date

August 3, 1961

August 9, 1961

August 14, 1961

August 17, 1961

August 18, 1961

Proceedings

Filed defendant Hughes Tool Co.’s

notice to take deposition of Ben-

Fleming Sessel and Robert A. Kerr.

-Memo endorsed on notice of motion

filed July 5, 1961—Motion Denied.

This is an Order. No Settlement is.

necessary.—Murphy, J.

Filed affidavits, exhibits, complaint

and notice of motion for an order

dismissing complaint, ete.—return-

able August 29, 1961.

Fi'ed defendant Hughes Tool Co.’s

memorandum in support of motion

to dismiss complaint.

Filed plaintiff’s proposed schedule

for taking of depositions.

Filed Opinion #27139 granting de-

fendant’s motion for priority of

taking depos'tions by Hughes Tool

Co.—Herlands, J.—mailed notices

of entry August 14, 1961.

Filed affidavit of Chester C. Davis

under Rule 9(f).

Filed affidavit, exhibits and notice

of motion for an order directing de-

fendant Hughes Tool Co. to pro-

duce—returnable August 22, 1961.

Filed plaintiff's Points and authori-

ties in support of its motion to pro-

duce.

Filed plaintiff’s notice to take depo-

sition of Howard R. Hughes.

A-xii

List of Relevant Docket Entries

Date

August 18, 1961

August 22, 1961

August 23, 1961

Proceedings

Filed plaintiff’s amended notice re:

depositions in compliance with deci-

sion of Herlands, J. August 14,

1961, ete.

Filed defendant Hughes Tool Co.’s

notice to take deposition of Bankers

Trust Co.

Filed defendant Hughes Tool Co.’s

notice to take deposition of Pruden-

tial Insurance Co.

Filed defendant Hughes Tool Co.’s

notice to take deposition of Irving

S. Olds.

Filed defendant Hughes Tool Co.’s

notice té take deposition of Ernest

R. Breech.

Filed defendant Hughes Tool Co.’s

notice to take deposition of Morgan

Guaranty Trust Co.

Filed Supplemental notice of tak-

ing deposition of Warner Mendel

by defendant Hughes Tool Co.

Filed affidavit, exhibits and notice

of motion to assign this case to a

judge for all purposes, etc.—Re-

turnable August 21, 1961 in Cham-

bers before Ryan, J. |

Memorandum endorsed on notice of

motion filed August 23, 1961 ad-

journing hearing thereon to August

29, 1961 at 11 A.M. or the further

order of the Court—Ryan, J.

A-xiii

Tist of Relevant Docket Entries

Date

August 23, 1961

August 24, 1961 -.

August 31, 1961

September 1, 1961

September 5, 1961

September 8, 1961

October 2, 1961

October 17, 1961

Proceedings

Filed affidavit, exhibit and order

adjourning motion of Hughes Tool

Co. for dismissal and summary

judgment to September 5, 1961 to be

heard thereafter on a date to be set

by further order of this Court,

adjourning depositions, and staying

. proceedings until August 29, 1961—

Rvan, J.

Filed copy of above order of Au-

gust 23, 1961 with admission of

service.

Filed order referring action to

Metzner, J. for all purposes—

Ryan, J.

Filed plaintiff's notice of true copy

of order of Ryan, Ch. J., August 31,

1961.

Memorandum endorsed on notice of

motion filed August 9, 1961 refer-

ring motion to Judge Metzner—

Cashin, J.

Memorandum endorsed on notice of

motion filed August 17, 1961 refer-

ring motion to Judge Metzner—

Cashin, J.

Filed pre-trial order on discovery,

depositions and motions for sum-

mary judgment—Metzner, J.

Before Metzner, J.—Pre-trial con-

ference held.

Filed transcript of record of pro-

ceedings of September 6, 1961.

Date

November 2, 1961

December 5, 1961

January 12, 1962

January 24, 1962

January 25, 1962

February 8, 1962

february 14, 1962

List of Relevant Docket Entries

A-xiv

Proceedings

Filed transcript of stenographer’s

minutes of proceedings of October

2, 1961.

Filed Opinion #27343 granting mo-

tion for production and inspection

as indicated herein—Settle order—

Metzner, J.

Filed affidavit of service by Frank

O’Connell on defendant Raymond

M. Holliday January 10, 1962.

Filed Volume #1 of deposition of

Charles C. Tillinghast, Jr.

Filed Volume #2 of deposition of

Charles C. Tillinghast, Jr.

Filed one envelope containing Ex-

hibits to Charles C. Tillinghast, Jr.

deposition.

Filed plaintiff’s notice of taking

deposition of Howard R. Hughes,

ete.

Filed Pre-Trial order narrowing

and formulating issues and appoint-

ing J. Lee Rankin as Special Mas-

ter, 36 West 44th Street, New: York

City, to act in connection with depo-

sitions and other discovery pro-

ceedings, etc.—Metzner, J. mailed

notice.

Filed affidavit, exhibits and order

bringing in additional parties as de-

fendants and amending title of ac-

tion as indicated herein. Issued

summons on counterclaim—Metz-

ner, J.

A-xv

List of Relevant Docket Entries

Date

February 14, 1962

February 19, 1962

February 21, 1962

February 26, 1962

Proceedings

Filed Answer to complaint and its

counterclaims herein of defendant

Hughes Tool Co.

* Filed Opinion #27581. The motion

is denied. So ordered. Metzner, J.

mailed notice.

Filed affidavit and notice of motion

for ruling pursuant to Rule 26, dep-

osition of plaintiff be concluded

prior to commencement, etc. before

the Special Master.

Filed Notice of Motion for order

revising the schedule of depositions,

etc.—Returnable before Judge

Metzner, February 23, 1962 at 11:00

A.M. (also for judgment dismiss-

ing the counterclaims).

Filed Notice of Motion for order

granting Dillon, Read & Co. an ad-

ditional defendant on counterclaims

extension of time, to reply to coun-

terclaims etc.—Returnable before

Judge Metzner, February 23, 1962

at 11:00.

Filed notice of taking deposition of

defendant Hughes Tool Co. by H.

R. Hughes on-February 8, 1962.

Filed notice of motion for order re-

vising the schedule of depositions

and for judgment dismissing coun-

terclaims, etc. returnable/forthwith

Before Judge Metzner.

Filed transcript of record of pro-

ceedings on February 23, 1962.

A-xvi

List of Relevant Docket Entries

Date

March 1, 1962

March 5, 1962

March 6, 1962

March 22, 1962

March 26, 1962

April 4, 1962

Fooneting:

Filed affidavits, exhibits and notice

of motion before Special Master on

March 2, 1962 for a ruling that

defendant Hughes Tool Co. is en-

titled to protective relief re: pro-

duction of financial statement.

Memo endorsed on notice filed Feb-

ruary 26, 1962. Motion disposed of

by pre-trial order of this date.

Metzner, J. (Dillon, Read).

Memo endorsed on motion filed Feb-

ruary 26, 1962. Motion disposed of

by pre-trial order of this date.

Metzner, J. (Equitable, Metropoli-

tan, Oates and Hagerty).

Filed Pre-Trial order setting dates

for further hearings, etc. Metzner,

Memo endorsed on motion filed Feb-

ruary 26, 1962. Motion disposed of

by pre-trial order of this date.

Metzner, J. (Irving Trust and Ses-

sel).

Filed affidavit and order of Special

Master J. Lee Rankin binding par-

ties by provisions herein (see or-

der).

Filed Answer to complaint by de-

fendant Raymond M. Holliday.

Filed affidavit and notice of motion

before the Special Master return-

able April 6, 1962, to declare certain

documents privileged or not called

for, etc.

A-xvii

List of Relevant Docket Entries

Date

April 16, 1962

April 18, 1962

May 3, 1962

May 4, 1962

May 10, 1962

May 11, 1962

May 17, 1962

Procesdings

Filed defendant Hughes Tool Co.’s

Memorandum in opposition to mo-

tion of plaintiff to strike or dismiss

counterclaims one through five and

to dismiss or for summary judg-

ment as to counterclaim six.

Before Metzner, J., hearing held

on motion to strike.

Filed transcript of proceedings of

April 18, 1962.

Filed plaintiff’s Trans World Air-

lines Inc.’s interrogatories to de-

fendant Hughes Tool Co.

Filed plaintiff’s Trans World Air-

lines Inc.’s interrogatories to de-

fendant Raymond M. Holliday.

Filed pre-trial order. Metzner, J.

Filed Oath of Special Master, J.

Lee Rankin.

Filed affidavit and notice of motion

for review of opinion of Special

Master returnable before Judge

Metzner.

Filed defendant’s memorandum of

law in support of Hughes Tool Co.

application. for review of Special

Master’s ruling of the attorney-

client privilege.

Hearing held on motion in opposi-

tion to application of defendant

Hughes Tool Co. for review of a de-

cision of the Special Master. De-

cision reserved. Metzner, J.

A-xviii

List of Relevant Docket Entries

Date

June 8, 1962

June 12, 1962

July 11, 1962

July 12, 1962

Proceedings

Filed affidavit and notice of motion

before Metzner, J. at time and place

to be fixed by him for review and

reversal of so much of order of

Special Master, rendered June 4,

1962, as overrules Hughes Tool

Co.’s objections to interrogatories,

ete.

Filed transcript of record of pro-

ceedings for May 17, 1962.

Filed transcript of record of pro-

ceedings for May 7, 1962.

Filed Memorandum of Hughes

Tool Co. supporting application

for review.

Filed Memorandum of defendant

Hughes Tool Co. in opposition to

application of Trans World Air-

lines Inc. for reversal of ruling of

Special Master re applicability of

Rule 4 to this action.

Filed pre-trial order _ modifying

ruling of Special Master re inter-

rogatories on defendant Hughes

Tool Co. appeal (modified as indi-

cated and as modified is sustained).

(see order) So ordered. Metzner J.

Mailed notice.

Memo endorsed on motion filed

June 8, 1962—Disposed of in

accordance with pre-trial order

dated today. Metzner, J. Mailed

notice.

A-xix

List of Relevant Docket Entries

Date

July 12, 1962

July 19, 1962

July 23, 1962

July 24, 1962

July 26, 1962

Proceedings

Hearing held before Metzner, J.

(Held on motion for review and

reversal of Special Master order

. “overruling Toolco objections to in-

terrogatories.)—Decision reserved.

Filed Notice of Motion for an order

clarifying and modifying pre-trial

order as stated, affidavit of mailing

attached.

Memo endorsed on Application for

clarification of order of July 12,

1962 — Application denied. So

ordered. Metzner, J. Mailed notice.

Memo endorsed on Motion filed

May 11, 1962; Court sustains ruling

of Special Master. If there are

any specific documents concerning

which the defendant desires specific

rulings as to admissibility they

may be submitted to Special Master

pursuant to directions appearing

on p. 4391 of transcript and in let-

ter of May 2, 1962 as modified by

letter of May 3, 1962. So ordered.

Metzner, J. Mailed notice.

Filed affidavit in support of appli-

cation of Hughes Tool Co. for an

order enlarging time in which to

answer to interrogatories.

Memo endorsed on affidavit filed

July 26, 1962—Motion granted to

extent that time of defendant to

answer plaintiff’s interrogatories

to August 27, 1962. So ordered.

Metzner, J. Mailed notice.

A-xx

List of Relevant Docket Entries

Date

July 27, 1962

Angust 1, 1962

August 21, 1962

’ August 24, 1962

August 29, 1962

September 5, 1962

September 6, 1962

September 7, 1962

September 13, 1962

Proceedings

Filed plaintiff’s Memorandum re-

viewing the history of TWA’s

application for permission to pro-

pound interrogatories to Hughes

Tool Co. concerning location of

Howard R. Hughes.

Filed transcript of Stenographer’s

Minutes of proceedings of July 12,

1962.

Filed notice of taking deposition of

Howard R. Hughes.

Filed authorization to accept serv-

ice for Howard R. Hughes to Mr.

Chester C. Davis.

Filed plaintiff’s affidavit and notice

of motion for answers to certain

interrogatories returnable Septem-

ber 6, 1962. Before Metzner, J. Rm.

1105 at 11:30.

Filed affidavit of Chester C. Davis,

in opposition to plaintiff’s Rule 37

motion.

Filed transcript of record of pro-

ceedings for July 26, 1962.

Before: Metzner, J.—Hearing held

on plaintiff’s motion for answers to

interrogatories. Decision reserved.

Filed affidavit of John F. Sonnett,

in reply to affidavit of Chester C.

Davis.

Filed affidavits, exhibits and affi-

davit of Chester C. Davis, in

rebuttal to affidavit of John F.

Sonnett.

A-xxi

List of Relevant Docket Entries

Date

September 17, 1962

September 18, 1962

September 19, 1962

September 20, 1962

September 24, 1962

September 26, 1962

October 11, 1962

October 24, 1962

November 2, 1962

Proceedings

Filed affidavit, exhibits of John F.

Sonnett, in reply to portions of affi-

davit of Chester C. Davis of Sep-

Aember 13, 1962, etc.

Filed plaintiff’s notice of hearing

[sic] from Special Master’s ruling,

as directed to TWA’s appeal from

so much of ruling of September 15,

1962, at 10:30 A.M. on September

19, 1962 in Room 906.

Filed notice of defendant Hughes

Tool Co. of application of review

and to reverse oral order of Special

Master of September 15, 1962.

Filed defendant Hughes Tool Co.’s

notice of application for review.

Filed Pre-Trial Order re: deposi-

tion of Howard R. Hughes. Metz-

ner, J.

Filed affidavit and notice of motion

for an order directing Special

Master to conduct pre-trial hear-

ings, returnable before Metzner, J.

September 28, 1962, at 10:00 A.M.

in chambers.

Filed show cause order to dismiss

the counterclaims of Hughes Tool

Co. and staying proceedings as to

defendant Breech, etc. Metzner, J.

returnable October 15, 1963, at

11:00 A.M.

Filed transcript of record of pro-

ceedings for September 19, 1962.

Filed plaintiff’s notice of taking

deposition.

A-xxii

List of Relevant Docket Entries

Date.

November 8, 1962

November 14, 1962

December 21, 1962

January 3, 1963

January 8, 1963

January 10, 1963

Proceedings

Filed memorandum of Hughes Tool

Co. in support of the rulings of the

Special Master rendered October

25, 1962.

Filed further interrogatories by de-

fendant Hughes Tool Co. to plain-

tiff.

Filed affidavit and notice of motion

for review of order of Special Mas-

ter, etc. returnable before Judge

Metzner, time and place to be fixed.

Filed defendant Toolco’s Notice of

Motion for review of order of Spe-

cial Master entered December 28,

1962 denying application for a di-

rection as indicated and request for

Court to fix schedule for filing pa-

pers in support or opposition to this

motion.

Filed defendant Toolco’s Notice of

Motion re: order of Special Master

entered December 28, 1962.

Filed application of plaintiff for

leave to withdraw notice of appeal

from order of Special Master.

Filed affidavit in support of appli-

cation of Toolco to take deposition.

Filed affidavit in support of appli-

cation of Toolco for review of order

of Special Master rendered Decem-

ber 28, 1962. ;

Filed Order disposing of Ruling of

Special Master. So ordered. Metz-

ner, J. Mailed notice January 11,

1963.

A-xxiii

List of Relevant Docket Entries

Date

January 18, 1963

January 22, 1963

‘January 22, 1963

January 22, 1963

Proceedings

Filed affidavit and Notice of Motion

for order that deposition of How-

ard R. Hughes may be taken as in-

‘dicated, ete.

Filed Opinion No. 28550. Unless

counsel for defendant indicates by

noon January 22, 1963 a desire to

change designated place, deposition

shall proceed in U. S. Courthouse in

Los Angeles. So ordered. Metzner,

J. Mailed notice of entry—Janu-

ary 21, 1963.

Filed Notice of Motion for order

that deposition of Howard R.

Hughes shall not be taken in this

action until after final adjudication

of aforesaid motion to dismiss, etc.

Returnable February 8, 1963.

Filed Stipulation and Order extend-

ing time for production of docu-

ments to January 23, 1963. Metz-

ner, J.

Filed Notice of Appeal—Mailed

copies January 23, 1963 to Cahill,

Gordon, Reindel & Ohl; Cravath

Swaine & Moore; Winthrop Stim-

son Putnam & Roberts ; Dunning-

ton, Bartholow & Miller; Chad-

bourne Parke Whiteside & Wolff;

and J. Lee Rankin.

In the Court of Appeals, January-March 1963

January 22, 1963

Filed preliminary record (certified

copy of notice of appeal).

Filed motion for stay.

A-xxiv

List of Relevant Docket Entries

Date Proceedings

January 23, 1963 © Filed motion to dismiss appeal.

January 23, 1963 Filed motion papers and order de-

nying motion for a stay.

January 23, 1963

February 8, 1963

March 13, 1963

Filed motion papers on motion to

dismiss appeal.

Filed judgment (dismissing ap-

peal).

Issued Mandate (judgment).

Filed transcript of minutes of argu-

ment of appeal.

In the District Court, January-July 1964

January 25, 1963

Filed plaintiff’s notice of with-

drawal of motion and application

for extension of time.

Filed notice of motion for review of

the order of Special Master of Jan-

uary 22, 1963.

Filed reply of additional defendant

Metropolitan Life Insurance Co. to

counterclaims. :

Filed reply of additional defendant

Equitable Life Assurance Society

to counterclaims.

Filed reply of additional defendant

Harry C. Hagerty to counterclaims.

Filed reply of additional defendant

James F. Oates, Jr. to counter-

claims.

Filed reply of additional defen-

dants Irving Trust Co. and Ben-

Fleming Sessel to counterclaims.

A-xxv

List of Relevant Docket Entries

Date

January 26, 1963

January 28, 1963.

January 28, 1963

February 1, 1963

February 2, 1963

February 5, 1963

Proceedings

Filed notice of motion of additional

defendants to adjudge defendant

Hughes Tool Co. to be in civil con-

tempt, etc. Returnable before Metz-

ner, J.

Filed plaintiff's affidavit re: motion

of additional defendants, ete.

Filed notice of application for order

directing additional defendant Til-

linghast to answer counterclaims of

defendant Hughes Tool Co.

Filed affidavit of John F. Sonnett,

in opposition to motion.

Filed memorandum of defendant

Hughes Tool Co. in support of mo-

tion to dismiss.

Filed appendix to memorandum of

defendant Hughes Tool Co. in sup-

port of motion to dismiss.

Filed Pre-Trial order, Metzner, J.

Filed TWA’s Memorandum in sup-

port of its complaint.

Filed affidavit in opposition to

pending motion of Hughes Tool Co.

re: jurisdiction.”

Filed folder marked Exhibit A.

Filed folder marked Exhibits B &

Filed reply of additional defendant

Dillon, Read & Co. to counterclaims

of defendant Hughes.

A-xxvi

List of Relevant Docket Entries

Date

February 6, 1963

February 7, 1963

February 8, 1963

Proceedings

Filed Notice of Motion for order

that all further proceedings be

stayed pending entering of final or-

der by Civil Aeronautics Board

with respect to Complaint of

Hughes Tool Co. and Request for

Investigation, ete. Returnable Feb-

ruary 8, 1963.

Filed reply memorandum of

Hughes Tool Co. supporting its mo-

tion to dismiss.

Filed memo endorsed on motion

filed January 18, 1963. Upon con-

sideration of defendants’ brief filed

on February 1, 1963 in support of

the motion to dismiss, the answer-

ing brief of plaintiff filed on Febru-

ary 2, 1963 in opposition, defen-

dants reply brief filed at noon today

and the oral argument on said

motion, the motion to dismiss is

denied. A formal opinion giving

the reasons of the court-will follow.

So ordered. Metzner, J. signed

February 6, 1963 at 6:05 P.M.

Filed Opinion No. 28588 defendant

Hughes Tool Co. motion to dismiss

is denied. Toolco’s application for

stay of all deposition-discovery pro-

ceedings pending an application for

stay to Court of Appeals granted,

etc. So ordered. Metzner, J. Mailed

notice February 8, 1963.

Filed notice of position (defendant

Hughes Tool Co.).

A-xxvii

List of Relevant Docket Entries

Date

February 11, 1963

February 13, 1963

February 18, 1963

February 21,

Proceedings

Filed true copy of USCA judgment

dismissing appeal for lack of juris-

diction.

Filed Reply of plaintiff Trans

World Airlines, Inc. to counter-

claims of defendant Toolco.

Filed Reply of additional defen-

dant Charles C. Tillinghast, Jr. to

counterclaims of defendant Hughes

Tool Co. CPW&W

Filed affidavit and Notice of Motion

returnable before Judge Metzner

re: order granting reargument, etc.

CGD

Filed motion returnable February

21, 1963 before Judge Metzner for

dismissal, etc. CS&M

Filed affidavit and Show Cause

Order to amend complaint, etc.

Returnable February 21, 1963 be-

fore Judge Metzner.

Filed notice of amendment to notice

of motion of Hughes Tool Co. CCD

Filed Memo endorsed on motion

filed February 6, 1963 ; to stay pro-

ceedings; Motion denied. See page

56 of transcript of hearing held on

February 8, 1963. So ordered,

Metzner, J. Mailed notive Febru-

ary 25, 1963 (dated February 12,

1963).

Aexciti

List of Relevant Docket Entries

Date

February 21, 1963

February 25, 1963

March 6, 1963

Proceedings

Filed memo endorsed on motion

filed January 26, 1963; motion

deemed withdrawn in view of mo-

tion by same additional defendants.

Returnable February 21, 1963—

Metzner, J.

Filed affidavit of Chester C. Davis

with copies of Exhibits A to C

attached.

Filed memo endorsed on motion

filed February 13, 1963; motion for

reargument denied, motion for

order referring stated questions

denied; motion for order making

certain orders of the CAB part of

record is denied. Metzner, J.

Mailed notice February 26, 1963.

Filed memo endorsed on motion

filed February 21, 1963; this motion

brought on to amend motion of

February 13—is denied. So or-

dered. Metzner, J. Mailed notice

February 26, 1963. *

Filed transcript of record of pro-

ceedings for October 29, 1962.

Filed transcript of record of pro-

ceedings for January 9, 1963.

Filed transcript of record of pro- .

ceedings for January 17, 1963.

Filed transcript of proceedings of

January 28, and February 6, 1963.

Filed transcript of proceedings of

February 8, 1963.

A-xxix

List of Relevant Docket Entries

Date

March 6, 1963

April 29, 1963

May 2, 1963

May 3, 1963

May 28, 1963

Mav 28, 1963

Proceedings

Filed transcript of proceedings of

February 21, 1963.

Filed memorandum of Hughes Tool

Co. in opposition to the motion of

TWA.

Before Metzner, J.—Pre-Trial hear-

ing held.

Filed Opinion #28896. A judg-

ment by default shall be entered in

favor of TWA against Tooleo and

counterclaims asserted by Toolco

shall be dismissed with prejudice.

Damages to be awarded to TWA

referred to Special Master. An

- immediate appeal from this order

is justified, ete. So ordered, Metz-

ner, J.

Filed memo endorsed on motion

filed February 18, 1963. See opin-

ion this date. Metzner, J.

Filed Opinion #28882. The sixth

counterclaim of the Answer of

Toolco, plaintiff’s motion for sum-

mary judgment is granted, defen-

dants’ motion is denied. So

ordered. Metzner, J. Mailed notice

May 29, 1963.

Filed judgment that each and every

counterclaim asserted in answer

and counterclaims of the defendant

Hughes Tool Co., except the sixth

counterclaim is dismissed as

against plaintiff with prejudice.

Metzner, J. Judgment entered May

28, 1963. Clerk. j "

A-xxx

List of Relevant Dockét Entries

Date

May 28, 1963

June 11, 1963

June 25, 1963

June 26, 1963

July 31, 1963

Proceedings

Filed judgment that additional de-

fendants on counterclaims, Equita-

ble Life; Metropolitan Life; Irving

Trust Co.; Dillon, Read & Co.; Ben-

Fleming Sessel; James F. Oates,

rg ; Harry C. Hagerty; and Charles

C. Tillinghast, Jr. dismissing with

prejudice this action and each of the

counterclaims herein as to addi-

tional defendants with costs and

disbursements in favor of said addi-

tional defendants against Hughes

Tool Co. to be taxed by the Clerk,

etc. Metzner, J. Judgment entered

May 28, 1963. Clerk. Mailed no-

tice May 29, 1963.

Filed defendants’ notice of appeal—

mailed copy to ill, Gordon,

Yor & Ohl, 80 Pine Street, New

ork, N. Y.

Filed transcript of record of pro-

ceedings of May 2, 1963.

Filed defendant’s (Hughes Tool

Co.) notice of appeal—mailed

copies to Cahill, Gordon, Reindel &

Ohl and attorneys Cravath, Swaine

& Moore and attorneys Winthrop

Stimson Putnam & Roberts and at-

torneys Dunnington Bartholow &

Miller and attorneys Chadbourne

Parke Whiteside & Wolff. (Mailed

this date.)

Filed deposition of Tillinghast, Vol-

umes 3 through 11.

Filed deposition of Tillinghast, Vol-

umes 12 through 15.

A-xxxi

List of Relevant Docket Entries

July 31, 1963

August 1, 1963

Proceedings

Filed: Volume 16, deposition of

Leslie.

Volumes 17 through 20, deposition

-of Rummel.

Volume 21, deposition of Cocke.

Volumes 22, 23, deposition of Leslie.

' Volume 24, deposition of Cocke.

Volume 25, deposition of Leslie.

Volume 26, deposition of Cocke.

Volume 27, deposition of Leslie.

Filed: Volume 28, deposition of

Cocke.

Volumes 29 and 30, Oral arguments.

Defendants Exhibits 1 through 369.

(Filed individually) except for 344.

Plaintiff’s Exhibits 1, 2 and 3.

TWA Exhibits A through E.

Document Exhibit 1.

Metropolitan Equitable Exhibit 1.

Special Master’s Exhibits 1 through

11.

TWA Exhibits 4 through 8.

Filed: Memorandum of Defendant

Hughes Tool Co.

Memorandum of Defendant Hughes

Tool Co.

Reply memorandum of plaintiff in

support of motion.

Brief with respect to defendant

~~Hughes Tool Co. Claimed defenses.

Notice of settlement (plaintiffs).

Plaintiff’s memorandum in support

of order.

Filed copy of proposed order by J.

Lee Rankin, Special Master.

A-xxxii

List of Relevant Docket Entries

Date

August 1, 1963

Angust 1, 1963

August 1, 1963

Proceedings

Filed additional defendants’ notice

to take deposition.

Filed additional defendants’ notice

to take deposition.

Filed additional defendants’ notice

of motion for order pursuant to

Rule 34.

Filed Memorandum of Certain Ad-

ditional defendants in support of

application.

Filed Plaintiff's memorandum in

support of order of depositions.

Filed notice of motion to strike in-

terrogatories.

Filed copy of motion to strike

answer.

Filed notice of motion to strike

answer of Hughes Tool Co.

Filed affidavit of K. F. Glenn.

Filed affidavit of Richard Grey.

Filed affidavit of Chester C. Davis.

Filed Hughes Tool Co. memoran-

dum in opposition to motion for

discovery.

Filed notice of motion re: taking of

deposition, etc.

Filed plaintiff’s memorandum in

opposition to application, ete.

Filed Hughes Tool Co. notice of

application.

A-xxxiii

List of Relevant Docket Entries

Date

August 1, 1963

August 9, 1963

August 24, 1963

Proceedings

Filed Hughes Tool Co. motion for

a direction.

Filed motion to commence deposi-

tion of Hughes.

Filed motion (confidential) to pro-

duce.

Filed Special Master’s Order (con-

fidential).

Entered this date, originally filed

October 13, 1962, defendant Toolco’s

interrogatories to plaintiff.

Entered this date order originally

filed December 18, 196%. Ordered

to produce. Metzner;

Entered this date, originally filed

October 23, 1962, transcript of rec-

ord of proceedings for September

6, 1962.

Filed notice that the record on ap-

peal has been certified to the

U.S.C.A. for 2nd Circuit this 9th

day of August, 1963.

Filed:

Notice of Motion of Toolco before

Judge Metzner for review of order

of Special Master overruling Tool-

co’s objections to TWA interroga-

tories, dated June 7, 1962.

Proposed form of stipulation and

order submitted by TWA—re: serv-

ice of process on Howard Hughes,

dated July 31, 1962.

Date

September 24, 1963

September 27, 1963

October 16, 1963

November 1, 1963

A-xxxiv

List of Relevant Docket Entries

Proceedings

Filed:

Additional defendants’ proposed

form of order and judgment re: dis-

missal of Toolco’s counterclaims

with prejudice, dated February

1963.

Proposed form of order submitted

by TWA covering entry of a default

judgment and dismissal of Toolco’s

counterclaims with prejudice, dated

March 1963.

Letter from Sonnett to Judge Metz-

ner, enclosing copy of CAB’s “Peti-

tion for Enforcement”, etc., dated

April 9, 1963.

Letter from Sonnett to Judge Metz-

ner, enclosing order of CAB No. E

19473, dated April 11, 1963.

Notice that annexed proposed form

of judgment order covering grant-

ing of default judgment will be sub-

mitted for settlement, signature and

entry, dated May 8, 1963.

Filed notice that the supplemental

record on appeal has been certified

to the U.S.C.A.

Filed notice that the record on ap-

peal has been certified to the

U.8.C.A. this date.

Filed stipulation and order—Mo-

tion of additional defendant Ernest

R. Breech to dismiss the counter-

claims of defendant Hughes Tool

A-xxxv

List of Relevant Docket Entries

November 1, 1963 |

July 8, 1964

Proceedings

Co. be and the same hereby is

withdrawn—Defendant Breech is

deemed to have appeared in this

-action—Toolco is taking the same

position with respect to additional

defendant Breech as it has taken

with respect to the other addi-

tional defendants—Any judgment

dismissing Toolco’s counterclaims as

against Breech by reason of the po-

sitions taken by Toolco shall be

governed by the determination of

the U.S.C.A. to the same extent and

with the same force and effect as

though Breech were a party to said

appeal—Metzner, J.

Filed Judgment—in favor of addi-

tional defendant on counterclaims

Ernest R. Breech dismissing with

prejudice and without costs this ac-

tion and each of the counterclaims

of the defendant Hughes Tool Co.

as to said additional defendant—

Metzner, J.—Judgment Entered.

November 1, 1963—Clerk. (Mailed

notices November 6, 1963.)

Filed U.S.C.A. Judgment with opin-

ion attached—The D.C. is found to

have had jurisdiction of the action

and that the orders of the Civil

Aeronautics Board do not consti-

_ tute a good defense to the antitrust

claim of the plaintiff. Judgment

Entered July 10, 1964. Clerk—en-

tered and mailed notice—July 10,

1964.

A-xxxvi

List of Relevant Docket Entries

Dete

July 8, 1964

- Proceedings

Filed U.S.C.A. Judgment with opin-

ion attached—The orders of the

D.C. is affirmed with exception of

the said order dealing with the sec-

ond counterclaim. Further ordered,

adjudged and decreed that the sec-

ond counterclaim be and it hereby

is dismissed for lack of jurisdiction

(opinion attached)—Judgment En-

tered—July 10, 1964. Clerk—en-

tered and mailed notice July 10,

1964.

In the Court of Appeals, May 1968-June 1965 [No. 28405]

May 13, 1963

May 17, 1963

June 6, 1963

August 2, 1963

August 6, 1963

August 8, 1963

Filed motion for leave to appeal

under Rule 1292 (b).

Filed 4 tw copies answer to petition

for leave to appeal; and exhibits in

support.

Filed motion papers (endorsed) and

order granting leave to appeal and

stay.

Filed order extending time to file

record on appeal to 8/9/63 of appeal

of 6/11/63 and appeal of 6/26/63.

Filed motion to docket appeals sep-

arately.

Filed motion papers and order

granting leave to docket separately

the appeals of 6/11/63 and 6/26/63;

appellants may file separate briefs

and appendices in each appeal; and

argument of the two appeals shall

be heard at the same time.

A-xxxvii

List of Relevant Docket Entries

Date

August 9, 1963

August 12, 1963

September 4, 1963

September 9, 1963

September 26, 1963

September 27, 1963

September 30, 1963

October 15, 1963

October 16, 1963

Proceedings

Filed record (original papers of

District Court) (& in 28406).

Filed order (and in 28406).

Filed application and order grant-

ing leave to file appellants brief not

to exceed 80 pages.

Filed 24 copies appendix, appellants

(Hughes Tool Co. and Raymond M.

Holliday)—Vol. I.

Filed 24 copies appendix, appellants

(Hughes Tool Co. and Raymond M.

Holliday)—Vol. II.

Filed brief, appellants (Hughes

Tool Company and Raymond M.

Holliday).

Filed order granting leave to file

appellee’s brief not to exceed 80

pages.

Filed supplemental record (original

papers of District Court) (& in

appellee’s (Trans

Filed application and order (en-

dorsed) granting leave to file reply

brief, appellants—of 30 pages).

Filed reply brief, defendants-appel-

lants.

Filed supplemental record (original

papers of District Court) (& in

28406).

+ A-xxxviii

List of Relevant Docket Entries

Date . Proceedings

November 12, 1963 Filed order granting leave to file

rejoinder brief in behalf of appel-

lee, (Trans World).

November 12, 1963 Filed rejoinder brief, appellee

(Trans World).

November 13, 1963 Argument heard (by: Lumbard,

: Kaufman and Hays CJJ).

November 20, 1963 Filed rebuttal brief, appellants

(Hughes Tool Co., and Raymond M.

Holliday).

June 2, 1964 Jurisdiction found in the District

Court, etc., Lumbard, Ch.J. (& ine

28406).

June 2, 1964 Filed judgment.

July 7, 1964 Issued Mandate (opinion and judg-

ment).

August 6, 1964 Original and supplemental records

returned to District Court (& in

28406).

August 17, 1964 Received recalled original record

from District Court (and in 28406).

August 19, 1964 Certified appendix and proceedings

to Chester C. Davis.

August 26, 1964 Certified original record to Chester

; C. Davis (& in 28406).

September 1, 1964 Filed notice of filing of petition for

writ of certiorari.

September 16, 1964 Filed notice of filing of petition for

writ of certiorari (& in 28406).

A-xxxix

List of Relewant Docket Entries

Date | Proceedings

November 20, 1964 Filled certified copy of order of Su-

November 20, 1964

March 10, 1965

April 5, 1965

May 18, 1965

June 3, 1965

June 8, 1965

preme Court granting petition for

Writ of certiorari (& in 28406).

Filled certified copy of order of Su-

Preme Court granting petition for

Writ of certiorari.

Filled opinion of Supreme Court (&

in 28406).

Filled certified copy of order of the

Sujpreme Court dismissing writ of

ceirtiorari (& in 28406).

Original record received from Su-

Preme Court (& in 28406).

Oriiginal and supplemental records

returned to District Court.

Filled receipt of return of original

& supplemental (2) record to Dis-

triet Court.

In the Court of Appeals, Miay 1968-June 1965 [No. 28406]

August 2, 1963

August 6, 1963

August 8, 1963

Filed order extending time to file

record on appeal to 8/9/63 of ap-

peal to 6/11/63 and appeal of

6/26/63.

Filed motion to docket appeals sep-

arattely. .

Filed motion papers & grder rant)

ing leave to docket separately the

appeals of 6/11/63 and 6 ; ap-

Pelleants may file separate briefs &

®PPendices in each appeal; and ar-

gument of two appeals shall be

heatrd at same time.

A-xl

List of Relevant Docket Entries

Date Proceedings

August 9, 1963 Filed record (original papers of

District CourtY (Filed in 28405).

August 12, 1963 Filed order (filed in 28405).

September 9, 1963

September 27, 1963

September 30, 1963

October 1, 1963

October 15, 1963

Filed application and order (en-

dorsed) granting leave to file ap-

pellant’s brief not to exceed 54

pages.

Filed 24 copies appendix, appel-

lant’s (Hughes Tool Company).

Filed brief, appellant’s (Hughes

Tool Company).

Filed supplemental record (original

papers of District Court) (filed in

28405).

Filed 24 copi2s appendix, appellee’s

(Trans World) (& in 28405).

Filed brief, appellee’s

World) (& in 28405).

Filed application and order (en-

dorsed) granting leave to file a joint

brief for additional defendants-ap-

pellees not to exceed 69 pages (filed

in 28405).

Filed 24 copies appendix to joint

brief, additional defendants-appel-

lees (& in 28405).

Filed joint brief, defendants-appel-

lees (& in 28405). .

(Trans

Filed application and order (en-

dorsed) granting leave to file reply

brief, appellant, of not more than 45

pp (& in 28405).

A-xli

Tist of Relevant Docket Entries

Date

October 15, 1963

October 16, 1963

November 13, 1963

June 2, 1964

June 17, 1964

July 6, 1964

July 7, 1964

August 6, 1964

August 17, 1964

August 19, 1964

Proceedings

Filed reply brief, defendant-appel-

lant (Hughes Tool) (& in 28405).

Filed second supplemental ‘record

“(original papers of District Court)

(& in 28405).

Argument heard (by: Lumbard,

Kaufman and Hays CJJ).

Judgment Affirmed, except second

counterclaiim—Dismissed, Lum-

bard, Ch.J. (filed in 28405).

Filed judgment.

Filed petition for rehearing and pe-

tition for rehearing in banc.

Petition for Rehearing denied, Per

Curiam.

Filed order denying petition for

rehearing.

Petition for Rehearing in banc de-

nied, Per Curiam.

Filed order denying petition for

rehearing in banc.

Issued Mandate (opinion and judg-

ment).

Original & supplemental records re-

turned to District Court (filed in

28405).

Received recalled original record

from District Court (filed in

28405).

Certified appendix and proceedings

to Chester C. Davis.

A-xlii

List of Relevant Docket Entries

Date

August 26, 1964

September 16, 1964

November 20, 1964

March 10, 1965

April 5, 1965

May 18, 1965

June 3, 1965

June 8, 1965

Proceedings

Certified Original record to Chester

C. Davis (filed in 28405).

Filed notice of filing of petition for

writ of certiorari (filed in 28405).

Filed certified eopy of order of Su-

preme Court granting petition for

writ of certiorari (filed in 28405).

Filed opinion of Supreme Court

(filed in 28405).

Filed certified copy of order of the

Supreme Court dismissing writ of

certiorari (filed in 28405).

Original record received from Su- |

preme Court (filed in 28405).

Original and supplemental records

returned to District Court.

Filed receipt of return of original

& supplemental (2) record to Dis-

trict Court (filed in 28405).

In the District Court, September 1965-August, 1970

September 7, 1965

September 21, 1965

Filed memorandum of plaintiff in

support of its motion to review fail-

ure of Special Master to make cer-

tain interim findings of fact.

Filed appendices to brief of plain-

tiff September 7, 1965.

Filed defendants’ memorandum in

opposition to plaintiff’s motion to

review Special Master’s Refusal to

make certain anticipatory findings.

A-xliii

List of Relevant Docket Entries

Date

September 23, 1965

September 24, 1965

September 30, 1965

November 16, 1965

December 21, 1965

December 29, 1965

Proceedings

Filed plaintiff’s notice of motion be-

fore Metzner, J. on August 31, 1965

for a review and reversal of the

‘ Opinion, etc. of the Special Master

dated July 30, 1965.

Filed plaintiff’s reply memorandum

in support of its motion to review

Special Master’s Refusal to make

certain interim Findings of Fact.

Filed defendants’ supplemental

memorandum in opposition to plain-

tiff’s motion to review Special Mas-

ter’s refusal to make certain find-

Filed Opinion #31817—The matter

is returned to the Special Master

to proceed in accordance with these

views. So ordered—Metzner, J.—

mailed notice.

Filed defendants’ (Hughes Tool et

ano.) notice of motion for pre-trial

order—Returnable before Metzner,

J. on December 30, 1965.

Filed brief of defendants Hughes

Tool et ano. in support of motion.

Filed plaintiff’ memorandum in

opposition to defendants’ motion

for pre-hearing order.

Filed exhibits to TWA’s memo-

randum of December 29, 1965.

Filed excerpts from Hughes Tool

Co. 1959 and 1960 Federal Income

Tax returns, ete.

A-xliv

List of Relevant Docket Entries

Date

January 5, 1966

February 1, 1966

February 4, 1966

February 7, 1966

April 1, 1966

August 31, 1966

Proceedings

Filed Opinion #31936—defendants’

motion for a: pre-hearing order is

denied. So ordered—Metzner, J.—

mailed notice.

Filed order—the order of this

Court dated March 3, 1963 is

amended to the extent of designat-

ing Herbert Brownell, Esq. of 25

Broadway, New York City, as Spe-

cial Master in place of J. Lee Ran-

kin—Metzner, J.—mailed notices.

Filed transcript of record of pro-

ceedings of December 30, 1965.

Filed order—Provisions of the or-

der dated May 10, 1962 providing

for payment of compensation to the

Special Master are made applicable

to the new Special Master, except

the payment shall be apportioned

equally between TWA and Hughes

Tool Co.—Metzner, J.

Filed Oath of Special Master.

Filed transcript of record of pro-

ceedings of September 30, 1965.

Filed Consent Order—All Boeing

Documents received in evidence in

this action shall be maintained in a

sealed file in the custody of this

Court or its clerks and none of the

same shall be made available for

examination by any person except

by order of this Court upon good

cause shown, etc.—Metzner, J.

A-xlv

Ist of Relevant Docket Entries

Date

December 2, 1966

September 21, 1968

November 1, 1968

November 15, 1968

December 2, 1968

Proceedings

Filed order re: documents—Con-

sented to—Metzner, J.

Filed report of Herbert Brownell,

Special Master.

Filed notice of filing Special Mas-

ter’s Report. Mailed copies to:

Cahill, Gordon, Sonnett, Reindel &

Ohl and Donovan, Leisure, Newton

& Irvine and Chester C. Davis.

Filed defendants’ objections to Spe-

cial Master’s Report.

Filed plaintiff's (TWA) objections

to report of Special Master, memo-

_ Yrandum in support of objections

and motion to modify and, as modi-

fied, to confirm report.

Filed appendix to memorandum in

support of defendants’ objections

to Special Master’s Report.

Filed memorandum in support of

defendants’ objections to Special

Master’s Report.

Filed defendants’ Hughes Tool &

Raymond Holliday Notice of Mo-

tion—objecting to the findings and

conclusions. . ~

Filed defendants’ memorandum in

opposition to plaintiff’s objections

to report of Special Master.

Filed plaintiff’s memorandum in

answer to memorandum in support

of defendants’ objections.

A-xlvi

List of Relevant Docket Entries

Date

January 20, 1969

December 23, 1969

December 31, 1969

January 16, 1970

—————

Filed transcript of record of pro-

ceedings September 27, 1968—Metz-

ner, J.

Filed Opinion #36406— * * * Con-

clusion—The report of the Special

Master awarding damages in sum

of $137,611,435.95 pursuant to 15

U.S.C. Sec. 15 is confirmed—So

Ordered. Metzner, J.

Filed plaintiff’s affidavit, applica-

tions and notice of motion for an

order determining and awarding to

Trans World Airlines, Inc., its cost

of suit including attorney's fee,

directing clerk to enter judgment in

favor of Trans World against de-

fendant Hughes Tool Co. and Ray-

mond M. Holliday in amount of

$137,611,435.95 plus cost of suit,

including reasonable attorney’s fees

as determined and awarded by

Court. Returnable January 21,

1970.

Filed plaintiff’s rere aed with

respect to interest. *

Filed Defendants’ memorandum in

opposition to plaintiff’s application

for counsel fees, cost of suit and

pre-judgment interest.

Filed affidavit of James V. Hayes,

attorney for defendants Hughes

Tool Co. and Raymond M. Holliday

A-xlvii

List of Relevant Docket Entries

Dae

January 21, 1970 re

January 21, 1970

January 30, 1970

February 9, 1970

February 11, 1970

April 13, 1970

Ar «il 18, 1970

Proceedings

in opposition to plaintiff’s applica-

tion for an order awarding to

plaintiff. Attached are exhibits and

affidavit by Chester C. Davis.

Filed supplemental affidavit of Dud-

ley B. Tenney; supplemental aff-

davit of Marshall H. Cox, Jr. and

affidavit of Lee H. Lasher.

Filed TWA’s reply memorandum.

Filed defendants’ Hughes Tool Co.

and Raymond M. Holliday affidavit

and notice of motion for order

granting partial new trial and

reopening the case.

Filed defendants’ memorandum in

support of motion for a partial new

trial.

Filed plaintiff's Memorandum in

response to defendants’ motion for

@ partial new trial.

Filed defendants’ reply memoran-

dum.

Filed Memorandum Endorsed on

motion papers filed January 30,

1970, “This motion is denied—So

Ordered: Metzner, J.” Mailed

notice.

Filed Exhibits A, B, C.

Filed affidavit of Chester C. Davis,

, attorney for defendant Hughes

“Tool Co. in opposition to plaintiff’s

motion for order determining and

awarding to TWA its costs of suit

herein, including a reasonable at-

torney’s fee and directing Clerk to

enter judgment.

A-xlviii

List of Relevant Docket Entries

Date

April 13, 1970.

April 14, 1970

April 30, 1970

May 5, 1970

Proceedings

Filed Opinion #36691 by Metzner,

J.—“Plaintiff moves for award of

reasonable attorneys fees and costs

of suit.—Reasonable attorneys fee

in this case is $7,500,000. Plaintiff

requests $2,230,602, as the costs of

suit—This request is accordingly

denied. Judgment shall be entered

accordingly. So Ordered: Metz-

ner, J.” Mailed notice.

Filed Judgment #70623—That the

plaintiff Trans World Airlines, Inc.

recover of the defendants Hughes

Tool Co. and Raymond M. Holliday,

the sums of $137,611,435.95 as dam-

ages, $7,500,000.00 as a reasonable

attorney’s fee and $336,705.12 as

costs, for a total amount of

$145,448,141.07, together with in-

terest thereon at the rate of 6% as

provided by law—Metzner, J.

Judgment entered April 14, 1970—

Clerk. Mailed notice ENT: April

16, 1970.

Filed Transcript of record of pro-

ceedings dated January 21, 1970. ©

Filed defendants’ memorandum in

support of application for a stay of

execution pending appeal.

Filed affidavit and Order that the

plaintiff Show Cause before Metz-

ner, J. on May 11, 1970 why an

order should not be entered grant-

ing a stay, pending appeal, of exe-

cution of the judgment entered on

April 14, 1970. Metzner, J. Mailed

notice.

A-xlix

List of Relevant Docket Entries

Dat

May 5, 1970

May 8, 1970

May 11, 1970

June 3, 1970

June 5, 1970

June 6, 1970

June 11, 1970

Proceedings

Filed defendants’ Notice of Appeal

—$5.00. Copy mailed to Cahill,

Gordon, Sonnett, Reindel & Ohl.

Filed Bond for Undertaking for

. costs on appeal in sum of $250 by

National Surety Corp.

Filed plaintiff's Memorandum in

Opposition to defendants’ applica-

tion for stay of execution without

adequate bond.

Filed Bond for Undertaking for

costs in the sum of $250 by U. S.

Fidelity and Guaranty Co.

Filed plaintiff’s Notice of Appeal—

$5.00. Copy mailed to Donovan

Leisure Newton & Irvine.

Defendant moves to have tran-

scripts of the proceedings sealed—

motion granted. Motion submitted

after argument. Metzner, J.

Filed Transcript of hearing before

Court on June 3 relating to defen-

dants’ motion for stay of execution

of judgment. Transcript is sealed

by order of Court and not to be

opened unless further order of the

Court. So Ordered: Metzner, J.

Filed Transeript of record of pro-

ceedings, dated May. 11, 1970.

Filed letter from Toolco’s counsel

dated June 3, 1970, with financial

information submitted to the Court

at the hearing on June 3, 1970.

This envelope to be opened only

upon order of the Court. June 10,

1970—Metzner, J.

List of Relevant Docket Entries

Date

June 10, 1970

June 16, 1970

June 18, 1970

June 22, 1970

A-l

Procesdings

Filed Memorandum of plaintiff in

opposition to continued stay of exe-

cution without security.

Filed letter from Cahill, Gordon,

Sonnett, Reindel & Oh] to Metzner,

J., dated May 19, 1970. .

Filed letter from Chester Davis,

dated May 19, 1970 to Metzner, J.

Filed Opinion #36856 by Metzner,

J.“ * * © Counsel are directed to

meet in continuous session and ap-

pear before the court on June 16 in

Room 1106 at 10:30 A.M. in form

that any needed resolution of dis-

putes can easily be disposed of. So

Ordered: Metzner, J.” Mailed no-

tice. «

Filed Consent Order that the exe-

cution of the judgment in favor of

TWA entered on April 14, 1970 be

stayed pending the determination

by the U. S. Court of Appeals for

the 2d Circuit with provision as in-

dicated. Metmer, J. .

Filed Consent Order that the time

for transmitting the record on

appeal to the Court of Appeals for

the 2d Circuit be extended to the

7th day of July, 1970. Metzner, J.

(Filed April 13, 1970) Entered let-

ter from Cahill, Gordon, Sonnett,

Reindel & Ohl to James V. Hayes

of Donovan Leisure Newton &

Irvine dated December 31, 1969.

A-li

List of Relevant Docket Entries

25,

July 1, 1970

July 2, 1970

July 10,1970

July 10, 1970

Proceedings

Filed Order that Letter of Credit as

indicated is to be filed by July 12,

1970 and Clerk is to retain said let-

ter until jndgment becomes final,

-ete. under conditions indicated.

Metzner, J. - Mailed notice.

Filed Box (a) containing tran-

scripts of damage hearings before

Special Master numbered 554-1

thru 554-16 inclusive.

Filed Box (b) containing tran-

scripts of damage hearings before

Special Master numbered 554-17

thru 554-32 inclusive.

Filed stipulation and order that

time to transmit record on appeal

shall be extended from July 7, 1970

to July 21, 1970. So Ordered:

Weinfeld, J.

Filed stipulation and order that the

following enumerated documents be

deemed docketed in the action and

part of the record on appeal as indi-

cated. So Ordered: Weinfeld, J.

Filed Stipulation that the record on

appeal shall be retained in the dis-

trict court until such time as the

Court of Appeals or any party shall

request transmittal of said record

or parts thereof.

Filed Bond dated June 26, 1970 that

defendants Hughes Tool Co. & Ray-

mond Holliday are held and firmly

bound unto the above named Trans

—

’

A-lii

List of Relevant Docket Entries

Date Proceedings

July 10, 1970 Filed Letter of Credit and docv-

mentation dated July 1, 1970.

July 13, 1970 Filed Notice that the record on

appeal has been certified but not

transmitted to U.S.C.A. for 2d Cir-

cuit this 13th day of July, 1970, by

virtue of document #557 which

provides for the retainment of the

documents in the District Court

until any party requests the trans-

mittal of said record or any parts

thereof.

August 26, 1970 Filed Transcript of record of pro-

ceedings, dated June 25, 1970.

August 26, 1970 Filed Transcript of record of pro-

ceedings, dated May 20, 1970.

_ August 26, 1970 Filed Transcript of record of pro-

ceedings, dated April 29, 1970.

August 26, 1970 Filed Transcript of record of pro-

ceedings, dated June 16, 1970.

In the Court of Appeals, 1970-1972

May 7, 1970 Filed statement of docket entries

and copy of notite of appeal

(Hughes Tool Co. & Holliday).

May 13,1970 ~ ~ Filed statement of docket entries

and copy of notice of appeal (Trans

World Airlines, Inc.).

May 14, 1970 Received docket fee.

July 2, 1970 Filed order deferring appendix re

30(C); plaintiff-appellant’s brief

filed by 8-3-70; defendants-appel-

lants’ brief to 10-15-70; plaintiff-

A-liii

List of Relieyant Docket Entries

Bm,

August 4, 1970

November 11, 1970

_Proseedings

&ppellant’s reply brief by 12-1-70;

Gefendants-appellants’ reply brief

by 12-22-70; joint appendix by 12-

31-70; copies of. previously filed

briefs by 1-15-71; further extension

Of defendants-appellants brief to

1. 15-70, in the event of such fur-

her extension, the times for filing

the further briefs shall be extended

y the same number of days.

Filed application and order grant-

Ung leave to file appellant’s brief

Tot. to exceed 83 pages.

Filed order granting leave to file

&ppellant’s brief not to exceed 230

. — Pages, and four annexes not to ex-

December 10, 1970

January 18, 1971

February 9, 1971

eed 80 pages.

Filed order that Plaintiff-Appel-

jAnt’s reply brief shall be filed by |

1.99.71; Defendant-Appellants’ re-

Ply brief filed 21 days after filing

Of Plaintiff-Appellant’s reply brief ;

JSint appendix shall be filed 30 days

efter Plaintiff-Appellant’s reply

prief, and copies of previously filed

bikiefs, revised to refer to pages of

the joint appendix, shall be filed 45

déys after filing of Plaintiff-Appel-

lant’s reply brief.

Filed order granting motion for

Pave to file an over-size reply

brief.

riled stipulation and order (en-

forse) extending time to file de-

“ndant-appellants reply brief to

e__]

February 25, 1971

_ March 4, 1971

Mareh 5, 1971

- March 22, 1971

March 22, 1971

May 7, 1971

June 15, 1971

List of Relevant Docket Entries

A-liv

Procesdings

2-26-71; Joint appendix filed by

$-3-71; copies of previously filed

briefs, revised to refer to pages of

the Joint appendix filed by 15 days

after filing of Joint appendix.

Filed order granting motion for

leave to file oversized reply brief

in excess of 25, but not more than

55, printed pages and one annex

not to exceed 40 pages (& in 35114).

Filed order extending time to file

Joint appendix to 3-5-71 and copies

of previously filed briefs, revised

to refer to pages of appendix ex-

tended to_15 days after filing of

joint appendix (& in 35114).

Filed joint appendix (Volumes I

thru VII) with proof of service

(& in 35114).

Filed answering brief, appellant

(Trans World Airlines, Inc.) (&

in 35114).

Filed brief, appellant (Trans

World Airlines, Inc.) (& in 35114).

Filed brief, appellants (Hughes

Tool Co. & Holliday) (& in 35114).

Filed reply brief, appellants

(Hughes Tool Co. & Holliday) (&

im 35114).

Argument heard (by: Smith, Kauf-

man & Hays, CJJ) (& in 35114).

Filed minutes of argument of ap-

peal (& in 35114).

A-lv

List of Relevant Docket Entries

Dato

September 1, 1971

September 15, 1971

September 17, .1971

September 28, 1971

September 29, 1971

October 7, 1971

October 13, 1971

October 18, 1971

Proceedings

Judgment affirmed as modified,

Kaufman, CJ (& in 35114).

Filed judgment (& in 35114).

. Filed motion for allowance of costs

with proof of service (& in 35114).

Filed petition for rehearing and

rehearing en banc with proof of

service (& in 35114).

Filed affidavit in opposition to mo-

tion for allowance of costs with

proof of service (& in 35114).

Filed order denying petition for re-

hearing (& in 35114).

Filed order denying petition for re-

hearing en banc (& in 35114).

Filed motion to stay issuance of

mandate with proof of service (&

| | eee

Filed order granting motion to al-

low costs to Trans World Airlines,

Inc. the sum of $68,725.51, to be

taxed against Hughes Tool Com-

pany (& in 35114).

Filed motion to renew and amend

motion for stay of mandate with

proof of service (& in 35114).

Filed order denying motion to re-

new and amend motion to stay man-

date; etc. (& in 35114).

November 1, 1971

November 30, 1971

February 28, 1972

A-lvi

List of Relevant Docket Entries

p 1 Proceedings

October 20, 1971 Certified original record & proceed-

ings for: Donovan, Leisure, New-

ton & Irvine, Esqs. (& in 35114).

Filed receipt by Supreme Court of

original record (& in 35114).

Filed copy of notice of Supreme

Court granting motion to stay

mandate (& in 35114).

Filed certified copy of order of Su-

preme Court granting writ of cer-

tiorari (Hughes) (& in 35114).

Filed certified copy of order of Su-

preme Court granting petition for

writ of certiorari (Trans World)

(& in 35114).

A-1

TWA Complaint

[Doe. 1]

[oarTion] Civil Action No. 61-2324

_ComPLaIntT

Plaintiff, by its attorneys, Cahill, Gordon, Reindel &

Ohl, for its complaint herein against the above-named de-

fendants, respectfully alleges:

First Ciam

Nature of Claim and Jurisdiction of Court

1. This complaint is filed and this action instituted

against defendants under Sections 4, 12 and 16 of the

Clayton Act (15 U.S.C. §§ 15, 22 and 26 (1958)) in order

to declare, to prevent and restrain, and to recover dam-

ages resulting from, the violation by defendants, as here-

inafter alleged, of Section 1 of the Sherman Act (15 U.S.C.

§1 (1958)), of Section 2 of the Sherman Act (15 U.S.C.

§2 (1958) ), of Section 3 of the Clayton Act (15 U.S.C. §11

(1958) ), and of Section 7 of the Clayton Act (38 Stat. 731,

15 U.S.C. (1946 Ed.) § 18).

II.

Description of Parties

2. Plaintiff (hereinafter sometimes called “TWA”) is

a corporation organized in 1934 and existing under the laws

of the State of Delaware and maintains its principal execu-

tive offices in the City of New York. TWA is the only air

carrier authorized under Certificates of Public Convenience

and Necessity granted by the Civil Aeronautics Board to

A-2

TWA Complaint

provide both transcontinental and transatlantic scheduled

air transportation in the interstate and foreign commerce

of the United States, and is now providing such transpor-.

tation, in competition at various points with various other

United States-Flag and foreign-flag air carriers.

8. Defendant Hughes Tool Company (hereinafter some-

times called “Toolco”) is a corporation organized and exist-

ing under the laws of the State of Delaware, has assets of

several hundred million dollars, transacts business within

the Southern District of New York, and was and is engaged

in interstate commerce, inter alia, since in of@&bout 1939 in

the development, manufacture and acquisition of aircraft

and related equipment from the manufacturers thereof in

various states and in the sale and lease of such aircraft to

air carriers in various other states for use in interstate

and foreign commerce.

4. Defendant Howard R. Hughes (hereinafter some-

times called “Hughes”) was, throughout the period of the

matters hereinafter complained of, and is an officer and the

sole stockholder of Toolco and directed, controlled and dom-

inated its activities.

5. Defendant Raymond M. Holliday (hereinafter some-

times called “Holliday”) for some years past was and is

the chief operating officer of Toolco in charge of TWA

affairs and since 1959 and to date has been a director of

TWA.

6. Atlas Corporation, named herein as a co-conspirator

but not as a defendant (hereinafter called “Atlas”), is a

corporation organized in 1936 and existing under the laws

of the State of Delaware. Northeast Airlines, Inc., a cor-

poration organized and existing under the laws of the State

of Massachusetts (hereinafter called “Northeast”), is an

A-3

TWA Complaint

air carrier engaged in the business of providing scheduled

air transportation in interstate commerce, and for some

years past has been and is now controlled by Atlas, by

means, inter alia, of the ownership by Atlas of 58% of the

stock of Northeast. The defendant Hughes for some years

past has had the beneficial ownership of Voting Trust cer-

tificates issued with respect to 11% of the Common Stock

of Atlas.

TL.

Commerce Involved

7. The trade and commerce involved in this action con-

(a) The furnishing of aircraft by sale, lease or

other means in interstate commerce of the United

States to TWA and other air carriers for use in air

transportation in interstate and foreign commerce

of the United States, as “aircraft”, “air carrier” and

“air transportation” are defined in 49 U.S.C. § 1301.

(b) The furnishing of jet-powered aircraft by sale,

lease or other means in interstate commerce of the

United States to TWA and other air carriers for

use in air transportation in interstate and foreign

commerce of the United States.

other means in interstate commerce of the United

States to TWA for use in the business of air trans-

portation in interstate and foreign commerce of the

United States. ‘

(d) The furnishing of aircraft—by sale, lease

or other means in interstate commerce of the United

States—used by scheduled United States-Flag air

carriers between certain pairs of cities in the United

States, such pairs of cities being those pairs of cities

between which in each instance TWA provides more

TWA Complaint

than 60% of the scheduled air transportation which

is provided by all United States-Flag air carriers.

(e) The furnishing of aircraft—by sale, lease or

other means in interstate commerce of the United

States—used by scheduled United States-Flag air

carriers between certain pairs of cities in the United

States, and between the United States and certain

foreign cities, such pairs of locations being those

pairs of locations between which in each instance

TWA provides the only scheduled air transportation

provided by United States-Flag air carriers.

(f) The financing in interstate commerce of the

United States of the acquisition by sale, lease or

other means of aircraft for use by TWA im air

rtation in interstate and foreign commerce

of the United States.

8. The nature and extent of such trade and commerce

with respect to TWA is more fully described as follows:

(a) TWA has, since its organization in 1934,

operated a domestic air carrier system between cer-

tain cities in the United States. The scheduled air

transportation provided by TWA in the United

States has been and is a substantial proportion of

that provided by all air.carriers within the United

States. During the periods set forth below, TWA

provided the percentages set forth below of all

scheduled passenger miles provided by all domestic

scheduled trunk air carriers within the United

States :

Year 1955 149%

Year 1956 15.1%

Year 1957 14.9%

Year 1958 15.0%

Year 1959 16.3%

Year 1960 15.2%

A5 -

TWA Complaint

(b) Since1946, TWA has operated an interna-

tional air transportation system between the United

States and certain cities in Europe, Africa and Asia.

The scheduled air transportation provided by TWA

between the United States and certain foreign cities

has been and is a substantial proportion of that

provided by all United States-Flag air carriers and

of that provided by all air carriers. During the peri-

ods set forth below, TWA provided the percentages

set forth below of all passenger miles provided by

scheduled United States-Flag air carriers between

the United States and foreign cities:

om % of U.8.-Flag

Year 1955 13.6%

Year 1956 12.9%

Year 1957 12.0%

Year 1958 12.5%

Year 1959 9.5%

Year 1960 12.5%

using, both in its domestic operations and in its

international operations, a substantial proportion of

all of the aircraft, both jet-powered and otherwise,

operated by all scheduled air carriers operating

within the United States, by all of the United States-

Flag scheduled air carriers operating between the

United States and foreign cities and by all of the

scheduled air carriers operating between the United

States and foreign cities.

(d) TWA provides and has provided a substan-

tial proportion of the scheduled transportation in

jet-powered aircraft provided by all carriers within

the United States, by all United States-Flag air

carriers between the United States and foreign cities

and by all air carriers between the United States

and foreign cities. In 1959, TWA provided over 1.1

A-6

TWA Complaint

billion passenger miles of scheduled jet air transpor-

tation.

(e) The requirements of TWA for commercial jet-

powered aircraft constitute and have constituted a

te and distinct market for United States

aircraft manufacturers by reason, inter alia, of de-

sign and flight characteristic requirements, fleet and

operating requirements, and the structure of the

domestic and foreign routes of TWA.

(f) TWA constitutes and has constituted a sub-

stantial proportion of the market for the various

types of commercial aircraft made by United States

aircraft manufacturers. For example, during the

period 1958 through 1960, TWA purchased and

leased jet-powered aircraft for amounts aggregat-

ing substantially in excess of $100,000,000, which

aircraft? were manufactured by manufacturers in

various states of the United States.

(g) TWA constitutes and has constituted a sub-

stantial proportion of the market for the various

types of commercial jet-powered aircraft, both long-

range and otherwise, made by United States manu-

facturers. For example, TWA currently has more

than $150,000,000 worth of jet-powered aircraft .on

order.

(h) TWA constitutes and has constituted a dom-

inant portion of a substantial market for aircraft,

that is, the market for aircraft for use between cer-

tain pairs of United States cities and between the

United States and certain foreign cities. In 1959,

TWA provided the only scheduled air transportation

between certain pairs of United States cities, such

transportation amounting to 332,000,000 passenger

- miles accommodating 391,000 passengers and ac-

counting for approximately 7.8% of the total number

of domestic passenger miles supplied by TWA in

1959. In 1959, TWA provided between 90% and

A-7

TWA Complaint

100% of the passenger miles of scheduled air trans-

portation between certain pairs of United :States

cities, such transportation by TWA amounting to

over 680,000,000 passenger miles accommodating

over 1,000,000 passengers and accounting for ap-

proximately 16.0% of the total number of domestic

passenger miles supplied by TWA in 1959. In 1959,

TWA provided between 80% and 90% of the pas-

senger miles of scheduled air transportation between

certain pairs of United States cities, such transpor-

tation by TWA amounting to over 331,000,000 pas-

senger miles accommodating 649,000 passengers and

accounting for approximately 7.8% of the total

domestic passenger miles supplied by TWA in 1959.

In 1959, TWA provided between 70% and 80% of

the passenger miles of scheduled air transportation

between certain pairs of United States cities, such

transportation by TWA amounting to 417,000,000

passenger miles accommodating 412,000 passengers

and accounting for approximately 9.8% of the total

domestic passenger miles supplied by TWA in 1959.

In 1959, TWA provided between 60% and 70% of

the passenger miles of scheduled air transportation

between certain pairs of United States cities, such

transportation by TWA amounting to 218,000,000

passenger miles accommodating 251,000 passengers

and accounting for 5.1% of the domestic passenger

miles provided by TWA in 1959. Thus, in 1959,

TWA provided more than 60% of the passenger

miles between certain pairs of United States cities,

such transportation by TWA amounting to almost

2 billion passenger miles accommodating more than

2.7 million passengers and accounting for 46.5% of

the domestic passenger miles provided by TWA in

1959. TWA is the only United States-Flag air car-

rier which is now authorized to provide scheduled

air transporation of passengers between the United

States and any of the following cities: Athens,

Geneva, Zurich, Milan, Algiers, Tunis, Cairo, Tel

TWA Complaint

Aviv, Dahran, Bombay and Colombo. Long-range

aircraft are used by TWA between the United States

and the above-named foreign cities ; all other aircraft

used by TWA are usable between one or more of the

pairs of United States cities between which TWA

provides the only scheduled air transportation.

TWA in 1959 provided the following percentages of

the scheduled air transportation measured by num-

ber of transatlantic passengers provided by all air

carriers between the United States and the three

principal ports of entry (London, Paris and Lisbon)

into Europe, Africa and Southwest Asia: United

States-London, 11%; United States-Paris, 17%;

United States-Lisbon, 32%.

(i) In 1960, operating revenues of TWA were sub-

stantially in excess of $300,000,000; net income was

in excess of $6,000,000. During the first quarter of

1961, TWA had an operating logs of approximately

$13,000,000 and a net loss of approximately

$9,000,000. re

\ ~ The Offenses Charged

9. Beginning in or about the year 1939 and continuing

up to and including the date of the filing of this complaint,

the defendants, Atlas and other persons acting for each of

them have been and are now engaged in: “

(a) A combination and conspiracy to restrain in-

terstate and foreign commerce of the United States

in violation of Section 1 of the Sherman Act;

A-9

TWA Complaint

eign commerce of the United States in violation of

Section 1 of the Sherman Act by requiring plaintiff

to boycott all suppliers of aircraft, including jet-

powered aircraft, except defendant Toolco;

(d) A combination and conspiracy to monopolize

a substantial segment of the interstate and foreign

trade and commerce of the United States in violation

of Section 2 of the Sherman Act;

(e) An attempt to monopolize a substantial seg-

ment of the interstate and foreign trade and com-

merce of the United States in violation of Section 2

of the Sherman Act;

(f) Sales and leases of jet-powered aircraft on the

condition, agreement and understanding that the pur-

chaser or lessee shall not buy or lease the goods of a

competitor or competitors of the vendor or lessor, in

violation of Section 3 of the Clayton Act; and

(g) Atquisitions of the stock of a corporation in

violation of Section 7 of the Clayton Act.

10. Each act of the defendants and Atlas hereinafter

alleged was done in furtherance of the offenses charged

in the preceding paragraph and was a part thereof and was

done with the primary purpose of restraining and monopo-

lizing the trade and commerce described above. It was the

intent of the defendants and Atlas, inter alia:

(a) That Tooleco would beconte a dominant source

of supply of jet-powered aircraft to air carriers;

_(b) That the defendants would seize control over

‘TWA and its business and use such control for their

own purposes;

(¢) That Toolco would become the sole source of

supply of jet-powered aircraft to TWA;

A-10

TWA Complaint

(d) That defendants would have TWA as a cap-

tive market and would supply the requirements of

TWA for aircraft, including jet-powered aircraft,

upon terms advantageous to themselves ;

- (e) That the requirements of TWA for aircraft,

including jet-powered aircraft, would be enlarged for

the benefit of defendants and Atlas by various

means;

(f) That suppliers of aircraft to TWA other than

the defendants would be boycotted and foreclosed

from the trade and commerce hereinbefore alleged;

(g) That defendants would supply TWA with the

aircraft essential to its business only on the condi-

tion that TWA would accept such financing arrange

ments relating to the aircraft as the defendants

dictated, and in turn that defendants would allow

TWA to procure financing essential for the acquisi-

tion of the aircraft it needed only on the condition

that TWA would accept such aircraft as the defend-

ants dictated; and

(h) That the defendants and Atlas would obtain

substantial profits for themselves, at the expense of

TWA and other air carriers, as the result of restric

tions upon competition in the trade and commerce

hereinbefore alleged. <

Acts Committed Prior to December 1960

11. Commencing in or about the year 1939 and at vari-

ous times thereafter, Tooleo, pursuant to an understanding

with and at the direction of Hughes, acquired Common

Stock of TWA. By such acquisitions, Tooleo acquired more

than 78% of such Common Stock. The purpose and the

effect of the acquisitions so made and the use by defendants

of the stock so acquired have been to foreclose competing

A-ll

TWA Complaint

suppliers of aircraft from the opportunity for supplying

aireraft to TWA.

12, Since in or about 1955 one of the most important

single factors in the operation of and competition among

air carriers engaged in air transportation in interstate and

foreign commerce has been the prospect, introduction and

eventual utilization of jet-powered aircraft.

13. By 1955, aircraft manufacturers (including Boeing

Company, hereinafter called “Boeing”, and Douglas Air-

aft Company, Inc., hereinafter called “Douglas”) had

prepared—to the general knowledge of the air carrier

industry—plans and drawings and otherwise had under-

taken preparations for the manufacture by themselves of

jet-powered aircraft intended for use by air carriers.

Beginning in or about 1955, many air carriers devoted sub-

stantial efforts of their own (a) to determining whether

the jet-powered aircraft then being developed by Boeing,

Douglas or others could be best utilized by them in their

respective operations, and (b) to obtaining jet-powered

uireraft suitable for their needs, including the participation

by them in the design of such aircraft. Boeing and Douglas

each contemplated the manufacture of and did ultimately

manufacture jet-powered aircraft for short-range flights

md for medium and long-range flights suitable for the

mepective needs of such air carriers.

14 Prior to 1955, defendants and General Dynamics

Corporation (hereinafter called “Convair”) entered into

w arrangement for the jont development of a jet-powered

ieraft to be manufactured by Convair and to be supplied

‘the defendants to air carriers, including TWA: In

r ce of that arrangement, the defendants required

A to provide to the defendants and Convair the use of

A-12

TWA Complaint

TWA’s highly skilled engineering and other personnel,

who were to participate and did participate in the design

and development of the aircraft to be manufactured by

Convair. It was the intention of defendants that TWA

would serve as a captive market for such aircraft which

Tooleo would procure to supply to TWA and other air

carriers. A jet-powered aircraft, designated as Model 18,

was so designed. In 1955, the defendants and Convair con-

cluded that the continued development of, and manufac.

ture of, Model 18 was not in their respective self-interests,

and the program for its development and production was

then abandoned. .

15. Prior to May 1, 1956, the defendants also entered

into a plan under which Tooleo would itself commence the

manufacture of a jet-powered aircraft with design and

range characteristics making it suitable for use on both

domestic and transatlantic routes. The defendants intended

that Tooleo would furnish this aircraft, to be known as the

“Golden Arrow”, by sale, lease or other means both to

TWA and to other air carriers. Activities looking to such

manufacture by Tooleo of the “Golden Arrow” were actively

pursued until in or about mid-1956, and were thereafter

abandoned by the defendants. -

16. In or about October 1955, at approximately the time

of the decision to abandon the Model 18, the first firm order

for jet-powered aircraft was placed with a United States

aircraft manufacturer by a United States-Flag air carrier;

that order was placed with Boeing by Pan American World

Airways, Inc., TWA’s principal international competitor.

In the ensuing month and a half, principal United States

and foreign air carriers—including major competitors of

‘'WA—placed orders for jet-powered aircraft with Boeing

or Douglas. These air carriers ordered 59 jet-powered air:

craft from Boeing and 95 jet aircraft from Douglas, whieh

orders were scheduled for delivery in 1959 and 1960.

— A-13

TWA Complaint

17. During this period when other United States-Flag

air carriers were placing orders for jet-powered aircraft,

and thereafter, the defendants caused and directed TWA to

forego making any arrangements for the acquisition, by

sale, lease or otherwise, of any jet-powered aircraft. In or

about February 1956, the defendants arranged for Toolco

to’place orders for 15 jet-powered aircraft with Boeing.

Thereafter, the defendants arranged for Toolco to place

orders with Boeing for an additional 18 jet-powered air-

aaft. In or about April 1956, the defendants arranged for

Tooleo to place orders for at least 30 Model 880 jet-

powered aircraft to be manufactured by Convair.

18. The purchase orders placed by Tooleo with Convair

and Boeing reserved to Toolco the privilege of assigning to

TWA the right to acquire the jet-powered aircraft so pur-

chased. Despite repeated requests by TWA, Toolco refused

throughout the period, of 1956 to 1960 to assign to TWA

the rights to acquire such aircraft. In or about June, 1959,

defendants caused six of the Boeing jet-powered aircraft

then on order by Tooleo to be diverted to the principal

transatlantic competitor of TWA.

19. During the period 1956 to 1960, the defendants re-

quired Convair to make certain changes in the design of

Model 880 aircraft on order by Toolco, but the defendants

prevented TWA from arranging with Convair for certain

design modifications which were desired by TWA and which

would not have interfered with the seheduled dates of de-

livery. During the year 1960 the defendants also prevented

id restricted TWA from making acceptance and test

ts from time to time of various specific Convair Model

80 aircraft then on order with Convair by Toolco.

}20. During the period 1959 to 1960, defendants arranged

for the lease to TWA by Toolco of certain jet-powered air-

A-14

TWA Complaint

craft on a day-to-day basis. Such aircraft were the first

and only jet-powered aircraft made available to TWA by

the defendants during the years 1955 to 1960 and the num.

ber of aircraft so leased by Toolco to TWA was inadequate

for the needs of TWA. Such leases were given on & con-

tinuing condition, agreement and understanding that TWA

would not purchase or lease aircraft from any other poten

tial supplier thereof. The effect of such continuing condi-

tion, agreement and understanding was to foreclose, to all

potential suppliers of jet-powered aircraft to TWA other

than defendants, the opportunity for selling or leasing jet

powered aircraft to TWA.

21. Prior to May 1960, the exact date being unknown to

TWA, Atlas, with knowledge of the conspiracy and other

violations of antitrust laws herein alleged, then joined with

the defendants in said violations, and agreed to cause

Northeast: to submit to TWA a proposed agreement of

merger upon terms advantageous to the defendants and

Atlas and disadvantageous to TWA. The purposes of

defendants and Atlas in proposing such a merger were

(a) To enlarge TWA’s requirements for new air.

craft, and thereby to enlarge the demand in the

market from which the defendants had foreclosed

oe would continue to foreclose all other suppliers,

(b) For Atlas to obtain stock of TWA on terms

advantageous to Atlas and its stockholders, including

defendant Hughes.

Northeast is a substantial air carrier operating under cer-

tifieates of public convenience and necessity and serving the

Fast Coast of the United States and Canada. In 1%!

Northeast’s revenue passenger miles totaled 519,000,000 and

its total assets exceeded $35,000,000.

A-15

TWA Complaint

22. In November 1960, while the proposal for merger

was pending, the defendants arranged for the lease by Con-

vair to Northeast of six of the Convair Model 880 aircraft

which Tooleo had ordered from Convair. Among the air-

eraft so leased to Northeast were three aircraft which

Tooleo previously by an agreement with TWA of May 9,

1960, had assigned to TWA.

23. Subsequent to the acquisition of stock by Toolco in

TWA, defendants for reasons of self-interest continuously

refused to allow equity financing by TWA except on condi-

tion that, as a result of any such financing, Tooleo would be

enabled to increase its equity position in TWA and instead

caused TWA to obtain funds chiefly by means of debt

fancing. TWA was thus rendered unable to seek the

fmancing it needed for the acquisition of aircraft except

mpon the approval of defendants. The purpose of the de-

fendants in rendering TWA dependent upon them for such

assistance in financing as defendants might choose to pro-

vide, and the effects thereof, were, among other ‘things,

(a) to create and maintain control in the defend-

ants of the business of financing the purchase of air-

craft for use by TWA, and

(b) to strengthen defendants’ control over the

acquisition of aircraft by TWA.

24. From 1955. until December, 1960, the defendants

wed their power over the financing of aircraft thus obtained

to compel TWA to acquire aircraft of the type and in the

manner dictated by the defendants and used their power

@er TWA’s acquisition of aircraft, obtained as herein-

lefore alleged, to compel TWA to obtain financing for the

sequisition of such aircraft of the type and in the man-

tr dictated by the defendants.

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TWA Complaint

25. At least as early as 1955, the needs of United State

air carriers for the extensive financing required for acquisi-

tion of jet-powered aircraft were recognized throughout the

air carrier industfy and by others, including the defendants

26. In 1955 and continuously thereafter until December,

1960, the defendants, pursuant to and in furtherance of

their plan to control TWA in a manner advantageous to

themselves, directed TWA to make no efforts itself to obtain

fmancing necessary for the acquisition of jet-powered air

craft required for the needs of TWA.

27. Commencing in the year 1955 and continuing there

after, various other air carriers, including competitors of

TWA, made appropriate arrangements for the financing of

jet-powered aircraft. In 1955 and 1956 various Unitei

States air carriers were able to obtain funds at a cost (or

interest rate per annum) in 1955 of 4%, and in 1956 at costs

ranging from 444% to 4%4%.

28. In 1955 and thereafter fora period of several yearn,

the defendants discussed with o various proposals for

the financing of jet-powered aircraft, but the defendants did

not make arrangements for such financing nor allow TWA

to make such arrangements until December 1960, at which

time the prevailing cost of funds (or interest rates) fo

debt financing was approximately 6-614%.

VI.

The Financing and Acquisition of Jet Aircraft

by TWA in and since December 1960

29. In connection with TWA’s acquisition from Toole

in December 1960 of certain jet-powered aircraft and the

rights to obtain certain additional jet-powered aircraft

from Boeing and Convair and in connection with other

A-17

TWA Complaint

fmancial transactions between TWA and Tooleco, TWA

delivered to Toolco a note dated December 30, 1960 for

$100,000,000, carrying an interest rate of 614%, which note

was subordinated to the indebtedness of TWA to various

banks and insurance companies for additional funds needed

by TWA for the purchase of these aircraft. —

30. As part of the arrangements with Toolco above

described, TWA agreed to offer to its stockholders not less

than $100,000,000 of its subordinated income debentures,

with attached warrants to purchase common stock of TWA;

the debentures were subordinated to TWA’s senior indebt-

edness to banks and insurance companies. Toolco agreed to

purchase, not later than three business days after expira-

tion of the subscription offer, a principal amount thereof

equal to the excess of $100,000,000 over the principal

amount purchased by others in the offering; Toolco also

was given the option to purchase, not later than three busi-

ness days after the expiration of the subscription offer, all

or any part of the debentures not purchased by stock-

holders pursuant to the subscription offer.

- $1. As part of the arrangements with Toolco and with

banks and insurance companies as above described, Toolco,

TWA and three Voting Trustees (Ernest R. Breech, Irving

§ Olds and defendant Holliday) executed an agreement

dated as of December 15, 1960. The agreement provided

that the TWA stock owned and to be owned by Toolco

would be placed in a’ Voting Trust, pursuant to which the

Voting Trustees, acting by a majority vote, were em-

powered to exercise their sole and absolute discretion in

respect of the TWA stock deposited with them and accord-

were authorized to elect directors who would be in

." of TWA’s management and policies.

- oa

A-18

TWA Complaint

32. The creation of the Voting Trust above described

was required by the financial institutions as a condition to

making loans to TWA of $165,000,000 also needed for the

purchase of the aforesaid aircraft, and which loans were

evidenced by a like amount of senior notes of TWA.

33. The Voting Trust, in which Toolco’s TWA stock

has been deposited pursuant to the terms of the Voting

Trust, provides in Article Thirteenth thereof that it shall

terminate on December 15, 1970, unless previously termi-

nated or extended as provided therein.

34. Thereafter and in early 1961, at a meeting of stock-

holders of TWA, the Voting Trustees, by majority vote,

and other stockholders of TWA entitled to vote duly elected

a Board of Directors of TWA and said Board of Directors

elected a new President of TWA.

35. In March 1961, after tareful consideration of

TWA’s requirements for additional jet-powered aircraft,

the officers of .TWA who were concerned with such matters

unanimously recommended to the Board of Directors of

TWA that TWA’s immediate needs for jet-powered air-

craft would best be served by the acquisition of 20 air-

craft, Boeing Model 707 131-B, and 6 eircraft, Boeing

Model 707 331-B. The Board of Directors authorized the

purchase of such aircraft. On April 30, 1961, TWA and

Boeing agreed on the purchase of these aircraft, with re-

lated spare parts and equipment, for delivery in 1962 at an

ultimate cost estimated at approximately $187,500,000. Of

this amount, TWA expects to provide approximately

$40,500,000 from its own funds and to borrow $147,000,000.

The borrowing is currently being negotiated with certain

insurance companies and banks.

A-19

TWA Complaint

VIL.

Acts Committed Subsequent to 1960

36. On and after December 31, 1960, the defendants,

despite the execution of the Voting Trust above described

and the deposit of Toolco’s TWA stock in said Trust, con-

tinued and renewed the offenses described in Paragraphs 9

through 28 above, as hereinafter alleged.

37. Since during the month of May 1961, the defend-

ants have insistently demanded of TWA that TWA not

purchase from Boeing the aircraft described above, but

instead that TWA purchase from Toolco 13 Convair Model

990 aircraft which Toolco had previously agreed to pur-

chase from Convair, despite the decision of TWA’s Board

of Directors, which was known to defendants, that such

Convair aircraft are not as suitable for TWA’s needs as the

aircraft which TWA wishes to purchase and is purchasing

from Boeing.

38. During the month of May 1961, defendants wrong-

fully attempted to coerce TWA into purchasing Convair

aircraft from Toolco by maliciously asserting for the first

time (a) that TWA might have an obligation to purchase

such aircraft from Toolco, (b) that the management of

TWA would be derelict in its duty to Toolco if it failed

to make such purchases, (c) that TWA’s management was

without authority to reach decisions on behalf of TWA

with respect to such purchases or alternatives thereto, and

(d) that the proposed purchases of aircraft from Boeing

were not in the interest of TWA. Defendants also sent

telegrams and other urgent messages to TWA, threatening

TWA, its directors, the Voting Trustees and the financial

institutions lending money to TWA with the institution of

A-20

TWA Complaint

a suit or suits against TWA, its management, its directors

and the Voting Trustees unless TWA decided to purchase

and did purchase the Convair aircraft.

39. During the month of May 1961, the defendants

also warned Boeing that its contract with TWA was not

binding upon TWA. The ‘defendants hereby maliciously

sought to interfere with, to impair and to disrupt the con-

tractual relationship, known to the defendants, between Boe-

ing and TWA, to the advantage of defendants and dis-

advantage of TWA.

40. The agreements made in December 1960, relating

to the financing of TWA’s purchase of jet aircraft, re-

quired, among other things, that TWA make, not later than

May 31, 1961, a public offering of rights to purchase its

subordinated income debentures with common stock war-

rants. In accordance with the provisions of those agree-

ments, the Board of Directors of TWA approved the filing

with the Securities and Exchange Commission of a Regis-

tration Statement relating to the proposed public offering

and such Registration Statement was filed with the Securi-

ties and Exchange Commission on March 30, 1961.

41. TWA, in order to comply with its obligation to

make the proposed public offering prior to May 31, 1961 as

agreed, requested the Securities and Exchange Commis-

sion to accelerate the effective date of the Registration

Statement to May 18, 1961. Thereupon defendants filed

objections with the Securities and Exchange Commission

to the request of TWA and demanded that the proposed

offering be deferred on the ground, among others, that

Tooleo had decided for the first time on May 10, 1961 to

make a public distribution of the debentures which were

being offered by TWA and which were to be acquired by

Tooleco pursuant to the provisions of the prior agreements.

A-21

‘TWA Complaint

42. Defendants further demanded that certain amend-

ments be made to the Registration Statement in order to

set forth, among other things, certain contentions of de-

fendants then made for the first time by defendants, in-

eluding, among others:’

(a) that notwithstanding the admitted legal power

of the Voting Trustees to act, the Voting Trust could

not be given effect according to its terms so as to

enable TWA to be operated independently of the

wishes of the defendants;

(b) that Toolco’s position was that it had been

compelled to enter into the Voting Trust under con-

ditions which would warrant an immediate termina-

tion of the Voting Trust;

enjoin the consummation of the Boeing purchase

transaction above described or taking action for dam-

ages against the persons responsible for the Boeing

agreements; and

(d) that there might be some basis upon which

Toolco could assert an equitable right to sell to TWA

the Convair aircraft previously ordered by Toolco.

43. After considering the contentions so advanced by

defendants, the Securities and Exchange Commission ac-

celerated the effective date of the Registration Statement,

as amended, so as to make the Registration Statement effec-

tive on May 24, 1961.

44. After the effective date of the Registration State-

ment and while the public offering was in progress, the

defendants publicly announced that they\proposed to sell

up to 85% of the rights to purchase subordinated deben-

tures which defendants were obligated to acquire under the

terms.of the aforesaid agreements, with the result that there

was a substantial decrease in the prices at which such rights

ould be sold and were sold to the public.

A-22

TWA Complaint

45. The contentions made by the defendants as alleged

in Paragraph 42 above and the public announcement made

by the defendants as alleged in Paragraph 44 above were

made for the purpose and with the intention that they

would receive wide public circulation, would substantially

decrease the prices at which the aforesaid rights could be

sold to the public, and would thereby impair and discour-

age TWA’s efforts to obtain fmancing from sources other

than the defendants, and would enable the defendants to

continue to condition the furnishing of financing to TWA

by defendants upon TWA’s acquiring jet-powered aircraft

only from defendant Toolco. ;

46. Defendants also warned the insurance companies .

and banks from which TWA was then attempting to arrange

the immediate borrowing of $30,000,000 of short-term funds

and the borrowing of $147,000,000 of secured funds required

for the purchase of the Boeing aircraft as hereinabove

alleged, that the Voting Trust was invalid and that any such

financing by them would be invalid. Such warning were

made by defendants maliciously and wilfally and with the

intent and purpose of disrupting and discouraging TWA’s

efforts to obtain such financing. As a result of such warn-

ings, at least one of the proposed lenders shas completely

withdrawn from all negotiations for the proposed financing,

and TWA’s efforts to obtain such financing have_ been

handicapped.

47. Inand since the month of May 1961, defendants and

Atlas, with knowledge of the conspiracy and offenses here-

inabove alleged, have demanded that TWA accept the pro-

posed r with Northeast on the terms previously

directed by|the defendants, which terms were and a not

advan to TWA but which if consummated wo d be

| in the interests of the defendants and Atlas. The defend-

A-23

TWA Complaint

ants have sought the merger on such terms for the purpose

of increasing their total direct and indirect stock ownership

in TWA and of increasing the number of aircraft to be sup-

plied by them to TWA, by enlarging the business of TWA.

48. The stock of TWA acquired by defendant Toolco has

thus been used by the defendants sincé December 31, 1960

in an effort to restrain, restrict and control TWA. Despite

the existence of the Voting Trust, the defendants and Atlas

have attempted to require TWA to obtain aircraft exclu-

sively from the defendants, to prevent TWA from obtaining

aircraft essential to its business from Boeing, to prevent

TWA from obtaining financing for the acquisition of such

aireraft except on terms dictated by defendants, to require

TWA to merge with another airline upon terms disadvan-

tageous to TWA, to enlarge the defendants’ indirect stock

interest in TWA and to regain control over TWA and its

entire business.

Vii.

Effects of Offenses

49. As the result of the offenses hereinabove alleged,

(a) Competition among aircraft manufacturers

and others in the furnishing of aircraft by sale, lease

or other means to TWA and other air carriers has

been restrained and monopolized.

(b) Competition among airoraft manufacturers

and others in the furnishing of jet-powered aircraft

by sale, lease or other means to TWA and other air

carriers has been restrained and monopolized.

and others in the furnishing of aircraft by sale, lease

or other means to TWA has been restrained and

monopolized.

A-24

TWA Complaint

(d) Competition among aircraft manufacturers

and others in the furnishing of aircraft by sale, lease

or other means for use by scheduled air carriers

between those cities in the United States, and be

tween the United States and those foreign cities,

between which points TWA provides the only sched-

uled air transportation by a United States-Filag air

carrier, hasbeen restrained and monopolized.

(e) Competition among aircraft manufacturers

and others in the furnishing of aircraft by sale, lease

or other means for use by scheduled air carriers be-

tween those cities in the United States, between

which cities TWA provides more than 60% of the

scheduled air transportation provided by United

States-Flag air carriers, has been restrained and

monopolized.

(f) Competition among United States-Flag sched-

uled air carriers and among all scheduled air car-

riers has been, is now being and will be injured.

(g) As a result of past, present and prospective

injuries to the second largest United States-Flag air

carrier operating outside of the Dnited States, the

national interest of the United States has been and

is being injured.

50. TWA has been immediately injured in its business

by Toolco’s acquisition of TW.A’s stock, in that TWA has

been denied the right freely to acquire aircraft necessary to

its operations and has received such aircraft as were made

available to it in an untimely manner. TWA has further

been immediately injured in its business by Toolco’s denial

to TWA of the authority or opportunity to acquire jet-

powered aircraft from any person or corporation other

A-25

‘WA Complaint

than Toolco. Unlessthe relief TWA requests is granted,

it will suffer further nd irreparable injury.

51. TWA has ben further and immediately injured

in its business in thaidefendants have supplied TWA with

aircraft, including }t-powered aircraft, essential to its

business upon the coxlition that TWA accept such financ-

ing arrangements reiting to such aircraft as the defend-

ants chose to dictate,and further in that defendants have

allowed TWA to proare financing essential for the acquisi-

tion of aircraft onlyupon the condition that TWA would

accept such aircraft s the defendants dictated, and unless

the relief TWA requsts is granted TWA will suffer fur-

ther and irreparableinjury.

52. TWA has futher been injured in the following

manner :

(a) TWA ws prevented from obtaining jet-pow-

ered aircraft ad was deprived of opportunity for

adequate use of jet-powered aircraft during the

years 1958, 199, 1960 and to date with a resultant

loss in profits. That loss may be substantially in-

creased as a reult of defendants’ continuing actions

heretofore desribed.

(b) TWA was foreclosed from the opportunity

for early salesof its obsolescent piston engine air-

craft, causing )ss to TWA.

on more advanageous terms than those available to

it in December1960 and thereby suffered a loss by

virtue of the geater cost of borrowing it ev

experienced. \

A-26

TWA Complaint

(d) TWA’s ability to obtain financing for its needs

was substantially impaired.

(e) TWA’s good will in its business of serving

passengers throughout the world was diminished.

53. As additional results of the offenses hereinabove

alleged, TWA further has been immediately and irrepara-

bly injured in that:

(a) TWA’s ability to obtain debt and equity finance.

ing for its future financial needs has been seriously

impaired.

(b) TWA’s efforts to obtain both short-term and

long-term financing for the purchase of the Boeing

aircraft which it has contracted to buy have been

seriously handicapped.

(ec) TWA’s ability to obtain both short-term and

long-term financing for the jet-powered aircraft

which it should order in the near future has been

impaired.

(ad) TWA’s ability at this time safely to order

additional jet-powered aircraft which it urgently

needs has been handicapped.

(e) The date when additional jet-powered aircraft

will be available to and will be in use by TWA has

been deferred.

(f) The period of disruption caused by the transi-

tion from non-jet to jet operation has been extended.

(g) The coordination of the change from non-jet

to jet operations has been disrupted over an extended

period of time.

(h) The management and eects of TWA has

been “eT over, an extended period of time.

A-27

TWA Complaint

54. Asa result of the foregoing, TWA has been injured

in its business and property in an amount estimated to be

in excess of $35,000,000, and which amount may become

substantially greater as a result of defendants’ continuing

violations as heretofore described.

55. TWA has no adequate remedy at law.

Szconp Clam

Nature of Claim and Jurisdiction of Court

56. Plaintiff’s claim arises from the violations by the

defendants of Sections 1 and 2 of the Sherman Act and

Section 7 of the Clayton Act. In all other respects, the

nature of the claim, the jurisdiction of the Court and the

descriptions of the parties and of the commerce involved

are as hereinbefore alleged in Paragraphs 1 through 8

hereof and such Paragraphs are hereby realleged.

II.

Offenses Charged

57. Since on or about December 31, 1960 and continuing

| to the date of the filing of this complaint, the defendants,

Atlas and others acting for each of them have been and are

now engaged in a combination and conspiracy to restrain

and monopolize and an attempt to mongpolize a substantial

segment of the interstate and foreign commerce of the

United States in violation of Sections 1 and 2 of the Sher-

man Act, and defendant Toolco, has used the stock of TWA

acquired by heer o as to restrain commerce and tend to

create a. mon teed vie or lines of erce T at

of Bettiog 7 of the Clayton } Ah

A-28

TWA Complaint

58. Each act of the defendants and Atlas hereinafter

alleged was done in furtherance of the offenses charged in

Paragraph 57, was a part thereof and was done with the

purpose and intent’as hereinbefore alleged in Paragraph 10

hereof, and Paragraph 10 is hereby realleged.

Ii.

Background of the Offenses

59. Paragraphs 11 through 35 hereof are hereby re

alleged as the background of the offenses charged. :

IV.

Acts Committed

60. Paragraphs 36 through 48 hereof are hereby re

alleged.

Effects of Offenses

61. As results of the offenses hereinabove alleged,

TWA has been immediately and irreparably injured as and

in the manner hereinbefore alleged in Paragraph 53 hereof,

and such Paragraph is hereby realleged.

62. If the defendants continue the offenses hereinbefore

alleged and succeed in their purpose and plan, the further

results and effects thereof will be those heretofore alleged

as already having occurred in Paragraphs 49, 50, 51 and 53,

and such results and effects are hereby reallaged as pro-

spective results and effects. : EA

63. As a result of the offenses complained of, TWAh

been injured in its business and property in substan

A-29

TWA Complaint

amount which cannot be accurately calculated at this time.

Such damages will, as a result of the defendants’ continuing

violations of the antitrust laws, be substantially increased

in the very near future.

64. Unless the relief TWA requests is granted, it will

suffer immediate, further and irreparable injury. TWA

has no adequate remedy at law.

Tarp Cram.

Nature of Claim and Jurisdiction of Court

65. Plaintiff's claim arises opt of the facts previously

alleged in support of the claims hereinbefore stated, and

this Court has jurisdiction to grant all relief available

under such facts since this Court has jurisdiction, as here-

inbefore alleged in Paragraphs 1 and 56, to determine each

of the claims hereinbefore stated and arising out of the

facts alleged. 3

IL.

Description of Parties and Background

of Acts Committed

66. The description of the parties involved is as herein-

before alleged in Paragraphs 2 through 6 hereof and the

background of the acts committed is.as alleged in Para-

graphs 29 through 35, and such Paragraphs are hereby

realleged.

\ \

Acts Com

¢ From |and after ber 31, 1960, the defendants

have maliciously and wilfully “i the business of TWA

}

} |

;

A-30

TWA Complaint

by acts alleged in Paragraphs 37 through 48 hereof, which

Paragraphs are hereby reallaged.

IV.

Effects of Acts

68. TWA has been injured as and in the manner herein.

before alleged in Paragraph 53, which Paragraph is hereby

realleged.

69. TWA has been injured in the amount of appror-

mately $10,000,000. Such damages will, as a result of de-

fendants’ continuing wrongful acts, be substantially in-

creased in the near future.

70. Unless the relief TWA requests is granted, it wil

suffer immediate, further and irreparable injury. TWA

has no adequate remedy at law.

PRAYER

Wuenerorg, plaintiff prays that this Court order, adjudge

and decree:

L «

With Respect to the First and Second Claims

Stated Hereinbefore,

(1) That the defendants and Atlas have violated Se

tions 1 and 2 of the Sherman Act, Section 7 of the Clayton

Act; and, with respect to the first claim only, Section 3 of

the Clayton Act;

(2) That the defendants divest’ themselves of all right

naa interest in the stock of plaintiff;

. Baad

A-31

TWA Complaint

(3) That the defendants pay to the plaintiff $105,000,000,

three-fold the damages sustained by plaintiff, together with

costs and attorneys’ fees;

(4) That the defendants, their officers, agents, servants,

employees, attorneys and all persons in active concert or

participation with them who receive actual notice of this

injunction be perpetually enjoined (a) from attempting to

exercise control or domination over the activities of TWA,

directly or indirectly, (b) from threatening suit against

TWA, its management or its directors either because of

the failure of any of them to act in any manner sought by

the defendants or because of the action of any of them in

any manner not sought by the defendants, and (c) from

acquiring or holding any interest, beneficial or otherwise,

direct or indirect, in the stock of plaintiff;

(5) That the defendants, their officers, agents, servants,

employees, attorneys and all persons in active concert or

participation with them who receive actual notice of this

injunction be during the pendency of this suit enjoined (a)

from attempting to exercise control or domination over the

activities of TWA, directly or indirectly, and (b) from

threatening suit against TWA, its management or its

directors either because of the failure of any of them to

act in any manner sought by the defendants or because of

the action of any of them in any manner not sought by the

defendants ; and

II.

With Respect to the Third Claim Stated Hereinbefore,

(1) That defendants pay to plaintiff compensatory

damages in the amountjof $10,000,000, and such other and

farther punitive and exemplary damages as to this Court

May seem just and proper; |

A-32

TWA Complaint

(2) That the defendants, their officers, agents, servants,

employees, attorneys and all persons in active concert

or participation with them who receive actual notice of this

injunction be, at first during the pendency of this suit, and

thereafter perpetually, enjoined (a) from attempting to

exercise control or domination over the activities of TWA,

directly or indirectly, (b) from interfering with any con-

tract made and entered by TWA and from threatening suit

against TWA, its management or its directors either be-

of the failure of any of them to act in any manner

sought by the defendants or because of the action of any

of them in any manner not sought by the defendants, and

ing TWA, directly or indirectly, in any activity done by

TWA pursuant to the authority vested in its officers and

directors; and

TH.

That the plaintiff have such other and further relief as

to this Court may seem just and proper.

Dated: New York, New York,

June 30, 1961.

Canmy, Gorpon, Remnper & OuL

By /s/ Joun T. Cann

John T. Cahill, Partner

By /s/ Joun F. Sonnetr

John F. Sonnett, Partner

Attorneys for Plaintiff

80 Pine Street — fo

New York 5, New York |

Mie

Iti 4

A-33 -

Order Referring this Action to Judge Metzner

for All Purposes, Dated August 31, 1961_~

[Doc. 42]

[caption ] 61 Civ. 2324

The above action is hereby referred to the Honorable

Charles M. Metzner, United States District Judge, for all

purposes.

Dated: August 31, 1961.

/s/ Sy tvesrer J . Ryraw

Sylvester J. Ryan

Chief Judge

A-34

Opinion and Order of December 5, 1961

[Doc. 50]

[carrion] 61 Civ. 2324

Merzyzp, D.J.:

Plaintiff moves pursuant to-Fed. R. Civ. P. 34 for the

production and inspection of certain documents. Dispute

exists as to the time when the documents shall be produced

and as to three categories of requested documents. The

first category refers to loans (item I(e)). The second cate-

gory refers to balance sheets and profit and loss statements

for the years 1939 through 1960 (item V(a)). The third

category refers.to federal income tax returns for the years

1939 to date (item V(b)).

The order of priority of deposition proceedings has al-

ready been set. Consequently, while a motion pursuant to

Rule 34 may be made at any time, it does not follow that

the order granting such a motion should vary previously

[fol. 711] established schedules under Rule 26. Holt v. The

James Sheridan, 12 F.R.D. 72 (S.D.N.Y. 1951); Technical

Tape Corp. v. Minnesota M. & M. Mfg. Co., 18 F.R.D. 318

(S.D.N.Y. 1955). The documents should be produced prior

to the dates scheduled for the taking of the depositions

noticed by plaintiff.

The complaint states claims of conspiracy in violation

of the antitrust statutes. The scope of proof is quite broad

in these cases and under the liberal federal rules wide lati-

tude is permitted in the deposition-discovery proceedings.

Rule 34 must be read in conjunction with Rule 26, which

permits testimony which is “reasonably calculated, to lead

to the discovery of admissible evidence.” The financial data

\ | | sought by 5 come within the “rule o my

| Kes

A-35

Opinion and Order of December 5, 1961

as applied to the allegations of the complaint. Income tax

returns are not protected by privilege. Konczakowski v.

Paramount Pictures, Inc., 19 F.R.D. 361 (S.D.N.Y. 1956).

Defendant may request relief pursuant to Rule 30(b)

gpon the settlement of ‘the order to be entered hereon.

Motion granted. Settle order.

Dated: New York, N. Y., December 5, 1961.

Charles M. Metzner, U.S. D. J.

A-36

Pretrial Order, February 7, 1962

| [Doc. 59]

[caption ] 61 Crv. 2324

OrpER

Pretrial conferences were held in this cause on January

10, 1962 and January 23, 1962, wherein the following

proceedings were had.

IL.

The deposition of the plaintiff by Charles C. Tillinghast,

Jr., shall be continued and the depositions of the other

witnesses shall be commenced in accordance with the

schedule annexed hereto. The Special Master hereinafter

appointed may vary this schedule upon application of either

party if in his dpinion the circumstances require such

variance.

IT.

_ Upon the consent of counsel for the plaintiff and the

defendant Hughes Tool Company, the Court was em-

powered to appoint a Special Master. J. Lez Ranxry, Esq,

of 36 West 44th Street, New York 36, New York is hereby

appointed Special Master to act in connection with the

depositions and other discovery proceedings undertaken by

any person now a party or any person who may hereinafter

become a party, with the following powers: to preside over

and supervise the conduct of depositions and in connection

therewith to rule on such objections ‘to questions, whether

heretofore made or to be made, as have‘not been reserved

by stipulation of the parties to the time of trial; to rule

A-37

Pretrial Order, February 7, 1962

on objections, whether heretofore made or to be made, with

respect to the production of documents; to make any and

all other rulings which may be required pursuant to the

provisions of Rules 26 to 37, and 45, of the Federal Rules

of Civil Procedure and such other rules as may from time

to time become applicable.

IV.

Any action taken or ruling made by said Special Master

shall be subject ‘to review by the Honorable Charles M.

Metuner, United States District Judge for the Southern

District of New York, upon timely application with reason-

able notice.

The Special Master shall be reimbursed for such nses

as are reasonably and necessarily incurred by him\and the

compensation of the Special Master is to be fixed at $60.00

per hour. Such reimbursement and compensation are to

be taxed as costs at the conclusion of this action; provided,

however, that until the taxation of costs the compensation

of the Special Master is to be paid at monthly intervals,

fifty per cent (50%) by plaintiff Trans World Airlines, Inc.,

and fifty per cent (50%) by defendant Hughes Tool Com-

pany, and provided, further, that such payments shall be

subject to reallocation among any additional parties who

may hereafter be joined and who my participate in the

depositions.

VI.

Defendant Hughes Tool Company shall file its answer

to the complaint herein upon the day following the comple-

tion, in accordance with the annexed schedule, of the deposi-

‘tion of plaintiff by Charles C. Tillinghast, Jr., Robert W.

and E. O. Cocke.

A-38:

Pretrial Order, February 7, 1962

VIL.

The deposition of plaintiff by A. V. Leslie, in view of his

present illness, is adjourned without date and shall be

re-scheduled by the Special Master upon reasonable notice

by the defendant at an appropriate time in light of the

health of the witness and at a date not in a conflict with

the annexed schedule.

VIII.

Any request for a change in the date fixed for the pro-

duction of writings and other material by the defendant

Hughes Tool Company, presently set for March 15, 1962 by

order of this Court dated December 18, 1961, shall be made

to the Special Master.

So Oxperzp.

Dated: New York N. Y.

February 7, 1962

/s/ CHartes M. Merzner

Charles M. Metzner

U.8S.D.J.

21, 1962

. 27, 1962

. 28, 1962

1, 1962

r. 8, 1962

t. 15, 1962

Pretrial Order, February 7,1962

SCHEDULE OF DEPOSITIONS

Depositions Noticed by Defendant

Hughes Tool Company

Deponent

Trans World Airlines, Inc.

By:

Charles C. Tillinghast, Jr.

R. W. Rummel

E. O. Cocke

Charles Thomas

Bank of America

By: Keith Carver

Robert Gordon

Bankers Trust Company

By: E. F. Ebert

Morgan Guaranty Trust Co.

of New York

By: John Schroeder

The Mellon Bank

By: Frederick Gwinner

Ralph Ehler

Ben-Fleming Sessel

Robert A. Kerr

Irving Trust Company

By: Ben-Fleming Sessel

Robert A. Kerr

Frederic H. Brandi

Arthur L. Wadsworth

Dillon, Read & Co., Inc. —,

By: Frederic H. Brandi

Arthur L. Wadsworth

James F. Oates, Jr.

Grant Keehn

Equitable Life Assurance Society

of the United States

By: . James F. Oates, Jr.

Grant Keehn

Warner Mendel

and Location

of Depositions

10 a.m.

80 Pine St.

New York, N. Y.

10 a.m.

The Irvine Ranch

13042 Myford Rd.

Tustin, if.

10 a.m.

Clerk’s Office

U. S. Court House

Los Angeles, Calif.

10 a.m., Room 3113

120 Broadway

New York, N. Y.

2 p.m., Room 3113

120 Broadway

New York, N. Y.

10 a.m.

Clerk’s Office

U.S. District Court

Pittsburgh, Pa.

10 a.m., Room 3113

120 Broadway

New York, N. Y.

10 a.m., Room 3143

120 Broadway

New York, N. Y.

10 a.m., Room 3113

120 Broadway

New York, N. Y.

10 a.m., Room 311

120 —T

New York, ° ¥.

Pretrial Order, February 7, 1962

Deponent

Harry C. Hagerty

Gordon P. Jenkins

Metropolitan Life Insurance

By: Horry C. Hagerty

Gordon P. Jenkins

Irving S. Olds

Ernest R. Breech

Boeing Compan

By: William M. Allen

J. O. Yeasting

Prudential Insurance Company

of America

By: Monroe Chappelear

IL.

Depositions Noticed by Plaintiff

Trans World Airlines, Inc.

Howard R. Hughes

Hughes Tool Company

By: Raymond Holliday

Hughes Tool Company

By: M. E. Montrose

Hughes’ Tool Company

By: C. H. Price

Hughes Tool Company

By: C. S. Johnson

Hughes Tool Company

By: H. E. Rogers

Hughes Tool Company

By: C. Collier

120 Broadway

New York, NJ

New York, N.}

10 a.m.

Clerk’s _ Office

New York, N. |]

10 a.m.

10 a.m., 18th

80 Pine Street

New York, N.

10 a.m., 18th Fi

80 Pine Stree

New York, N. ¥

A4l1

Toolco’s Answer and Counterclaims

[Doe. 63]

[carrion ] 61 Civ. 2324

Defendant Hughes Tool Company (hereinafter “Toolco”)

for its answer to the complaint and for its counterclaim

herein states:

Answering the First Claim for Relief

1. Tooleo denies each and every allegation of para-

graphs 7, 9, 10, 22, 23, 24, 26, 36, 37, 38 and 44 through 55

inclusive of the complaint.

2.. Tooleo admits the allegations contained in para-

graphs 2, 6, 25, 29, 30, 32, 33, 34 and 40 of the complaint.

3. Toolco admits that it is a corporation organized and

existing under the laws of the State of Delaware and that

it has assets of several hundred million dollars and except

asso admitted denies each and every allegation of para-

graph 3 of the complaint.

4. Toolco admits that Howard R. Hughes (hereinafter

“Hughes”) has been its sole stockholder from a time prior

to January, 1939 to the present, that from a time prior to

January, 1939 to December, 1960, he was an officer of

Tooleo, and except as so admitted denies each and every

dlegation of paragraph 4 of the complaint.

5. Tooleo admits that Raymond M. Holliday has been

for some years past, and now is, an officer of Toolco, that

fince 1959 he has been, and now is, a director of Trans

World Airlines, Inc. (hereinafter “TWA”), and except as

@admitted denies each and every allegation of paragraph

bef.the complaint ,

A-42

Toolco’s Answer and Counterclaims

6. Tooleo admits that TWA has, since its organization

in 1934, operated a domestic air carrier system between

certain cities in the United States, that since 1946 TWA

has operated an international air transportation system

between the United States and certain cities in Europe,

' Africa and Asia, that during the period from 1958 through

1960, TWA purchased and leased jet-powered aircraft for

amounts aggregating substantially in excess of $100,000,000,

which aircraft were manufactured by manufacturers in

various states in the United States, that in 1960 operating

revenues of TWA were substantially in excess of

$300,000,000 and net income after taxes in excess of

$6,000,000, that in 1959, TWA provided the only scheduled

air transportation between certain pairs of United States

cities, and, except as so admitted, denies that it has knowl-

edge or information sufficient to form a belief as to the

allegations of paragraph 8 of the complaint.

7. Tooleo admits that commencing in or about the year

1989 and at various times thereafter it acquired common

stock of TWA, that as at December 31, 1960, the amount of

stock so-acquired amounted to approximately 78.2% of such

common stock, and except as so admitted denies each and

every allegation of paragraph 11 of the conrplaint.

8. Tooleo admits that commencing in 1958 jet-powered

aircraft became one of-the most important factors in the

competitive operations of air carriers, and except as 60

admitted denies each and every allegation of paragraph 12

of the complaint.

9. Tooleo admits that by 1955 aircraft manufacturers

(including Boeing Airplane Company (hereinafter “Boe-

ing”) and Douglas Aircraft Company, Inc. (hereinafter

“Donglas”), had prepared to the general knowledge of

the air carrier industry plans and drawings and otherwise

A43

Toolco’s Answer and Counterclaims

had undertaken preparations for the manufacture of jet-

powered aircraft intended for use by air iers, that

many air carriers beginning in 1955 devoted tantial

efforts to determining what, if any, jet airc should

acquire and to obtaining jet aircraft suitable to their needs,

that Boeing and Douglas contemplated and did ultimately

manufacture jet-powered aircraft for long range and me-

dium range flights, and except as so admitted denies each

and every allegation of paragraph 16 of the complaint.

10. Toolco admits that General Dynamics Corporation,

Convair Division (hereinafter “General Dynamics”), on its

own account as one of the four major domestic aircraft

manufacturers, commenced a program prior to 1955 for the

design, development and manufacture of a jet-powered

transport aircraft designated the Model 18, that such pro-

gram never proceeded past the preliminary design stage

and was terminated in 1955 by General Dynamics, and

except as so admitted denies each and every allegation of

paragraph 14 of the complaint.

ll. Toolco admits that prior to May 1, 1956, it consid-

ered the manufacture of a jet-powered aircraft with design

and range characteristics suitable for use on both domestic

and transatlantic routes, that Tooleo contemplated that if

it did manufacture this aircraft it would furnish the same

to TWA and other air carriers, that it abandoned conside-

ration of manufacture of such an aircraft prior to mid-1956,

md except as so admitted denies each and every allegation

of paragraph 15 of the complaint.

12. Toolco denies that it has knowledge or information

sificient to form a belief as to the truth of the allegations

of paragraph 16 of the complaint.

%. Toolco admits that in January 1956 Toolco entered

intoan agreement with Boeing for the purchase of eight

A444

Toolco’s Answer and Counterclaims

Model 707-131 jet-powered aircraft with an option to pur.

chase seven additional such aircraft, that in 1956 Tooleo

exercised its option to purchase such additional aircraft and

also placed an order for eighteen long-range Boeing jet

transports, and that in June of 1956 Tooleo committed for

the purchase of thirty Convair 880 aircraft from General

Dynamics, and except as so admitted denies each and every

allegation of paragraph 17 of the complaint.

14. Tooleo admits that purchase orders placed by

Toolco with General Dynamics and Boeing gave Toolco the

right to assign to TWA the right to acquire the jet-powered

aircraft ordered by Toolco, and that Toolco released six of

the long-range Boeing jet transports on order in & transac.

tion with Boeing and Pan American World Airways, Inc.

which was recommended and approved by the management

of TWA, and except as so admitted denies each and every

allegation of paragraph 18 of the complaint.

15. Toolco admits that during the period 1956 to 196

changes were made in the design and configuration of the

Model 880 Convair aircraft ordered by Toolco and except

as so admitted denies each and every allegation of pare-

graph 19 of the complaint. «

16. Tooleo admits that in the period 1959 and 196

Tooleo leased to TWA certain jet-powered aircraft on 4

day-to-day basis, that such aircraft were the only jet

powered aircraft flown on TW ‘A’s scheduled routes during

said years, and except as so admitted denies each and every

allegation of paragraph 20 of the complaint.

17. Toolco admits that on or about May 17, 1960, North

east Airlines, Inc. (hereinafter “Northeast”) submitted to

TWA a proposed agreement for the merger of Northeast

with and into TWA, that Northeast is a substantial air car

A45

Toolco’s Answer and Counterclaims

rier operating under certificates of public convenience and

necessity and serving the east coast of the United States

and Canada, that upon information and belief in 1959

Northeast’s revenue miles totaled 519,000,000 and its total

assets exceeded $35,000,000, and except as so admitted

denies each and every allegation of paragraph 21 of the

complaint.

18. Toolco denies that it has knowledge or information

sufficient to form a belief as to the truth of the allegations

of paragraph 27 of the complaint.

19. Toolco admits that subsequent to 1955 it discussed

with various persons various proposals for the financing of

jet-powered aircraft and except as so admitted denies each

and every allegation of paragraph 28 of the complaint.

20. Toolco admits that as part of the arrangements with

certain banks and insurance companies, Tooleo, TWA and

three Voting Trustees (Ernest R. Breech, Irving 8S. Olds

and Holliday) executed an agreement dated as of December

15, 1960, which provided that the TWA stock owned and to

be owned by Toolco would be placed in a voting trust (here-

inafter “the Voting Trust”), and except as so admitted

denies each and every allegation of paragraph 31 of the

complaint.

2L Toolco denies that it has knowledge or information

sufficient to form a belief as to the truth of the allegations

of paragraph 35 of the complaint. =

22. Toolco admits that on or about May 31, 1961, it sent

a telegram to Boeing that set forth certain positions of

Tooleo and except as so admitted denies each and every

allegation of paragraph 39 of the complaint.

8. Toolco admits that TWA requested the Securities

tad Exchange Commission to accelerate the effective date

A46

Toolco’s Answer and Counterclawms

of its Registration Statement to May 18, 1961, and that

Tooleo opposed such acceleration by reason of certain def.

ciencies in said Registration eee adem

admitted denies each and every allegation of paragraph 4!

of the complaint.

24. Tooleo admits that pursuant to the direction of the

Securities and Exchange Commission its counsel set fort

in a letter to the Securities and Exchange Commission ani

TWA a statement as to the respects in which TWA’s Regis

tration Statement might be deficient, that in said letter it

was stated to be the position of Toolco that it was compellel

to enter into the Voting Trust under conditions whid

would warrant a termination of the Voting Trust otherwix

than in accordance with the terms of the arrangement

under which it was created, that it was further stated n

said letter that Toolco had requested its counsel to invest

gate the possibility of enjoining the Boeing purchase tram

action or of taking action on behalf of TWA against th

persons responsible for any commitments incurred or dan

ages suffered by TWA in connection with such program,

and except as so admitted denies each and every allegation

of paragraph 42 of the complaint. «

25. Toolco admits that after TWA’s Registration State

ment had been twice amended subsequent to the sending ¢

the aforesaid letter, the Securities and Exchange Commi:

sion accelerated the effective date of the Registration State

ment as so amended so as to make the Registration State

ment effective on May 24, 1961, and except as so admitte

denies each and every allegation of paragraph 43 of th

complaint.

A47

-Tooleo’s Answer and Counterclaims

Answering the Second Claim for Relief

“26. Toolco denies each and every allegation of para-

graphs 56 through 64, inclusive, of the complaint except in

so far as such paragraphs reallege prior paragraphs of the

complaint. As to such realleged paragraphs Toolco repeats

to the same extent as if herein fully set forth each and

every denial or admission which it has made with respect

to the paragraphs so realleged.

Answering the Third Claim for Relief

fi. Tooleo denies each and: every allegation of para-

graphs 67 through 70, inclusive, of the complaint except in

so far as such paragraphs reallege prior paragraphs of the

éomplaint. As to such realleged paragraphs Toolco repeats

fo the same extent as if herein fully set forth each and

every denial or admission which it has made with respect

to the paragraphs so realleged.

4s 4 Fimst ann Comprere Derense To THE COMPLAINT AND

+ Each Cram ror Retier ALLEGED THEREIN:

28. The complaint, and each of the claims for relief

alleged therein, fail to state a claim upon which relief can

be granted.

As 4 Szconp anp Comprete Derense To THE COMPLAINT AND

' Face Ciam ror Retier Attecep THerer :

29. The alleged facts set forth in the complaint do not

tonstitute violations by Toolco of Section 1 of the Sherman

Act (15 U. S. C. §1 (1958)), of Section 2 of the Sherman

Act (15 U. S. C. §2 (1958)), of Section 3 of the Clayton

Act (15 U. 8. C. §11 (1958)), or Section 7 of the Clayton

det (38 Stat. 731, 15 U. S. C. $18 (1946 Ed.)), and since

A48

Toolco’s Answer and Counterclaims

plaintiff TWA and defendant Tooleo are both Delaware

corporations, this Court lacks jurisdiction over the subject

matter of the action and over each of the claims for relief

alleged in the complaint.

As AND For A THIRD AND CoMPLETE AFFIRMATIVE DEFENSE

To THE CoMPLAINT AND EacH CLAIM FOR Rewrer ALLEGED

THEREIN :

30. Since both Toolco and TWA are Delaware corpors-

tions, the jurisdiction of this Court, if any, depends upon

the alleged violations of the antitrust laws contained in

plaintiff TWA’s complaint.

31. Toolco is a corporation primarily engaged in the

manufacture and sale of equipment for the oil well drilling

industry. It has at no time manufactured commercial

transports and its sole activities with respect to the sale or

lease of aircraft to commercial airlines (except for the sale

of two DC-6 aircraft originally acquired by Toolco for its

own use) have arisen from its efforts to assist TWA in

obtaining flight equipment adequate to its needs. Tt has at

no time been in the business of selling or leasing any flight

equipment to any airline and the only oceasiong on which

it has made equipment ordered by it available to any air-

line other than TWA have been when certain equipment

ordered for the use and benefit of TWA has proved to be

in excess of the needs or capabilities of TWA.

32. Toolco first acquired an interest in TWA in 1939

when the airline industry was in its infancy. By the end

of 1942 it had acquired approximately 45% of the total

outstanding shares of TWA. Thereafter, it acquired addi-

tional shares of TWA until it had acquired more than 78%

of said shares. ,

A49

Tooleo’s Answer and Counterclaims

33. The control of TWA by Toolco and the acquisition

of more than 78% of the common stock of TWA by Toolco

were subject to and approved by orders of the Civil Aero-

nautics Board (hereinafter “the Board”) under Section 408

of the Federal Aviation Act of 1958 (49 U.S.C. § 1378) or the

identical provisions of Section 408 of the Civil Aeronautics

Act of 1938. Section 414 of the Federal Aviation Act of

1958 (49 U. S. C. § 1384) exempts and relieves any person

affected by any such order from the operation of the anti-

trust laws and of all other restraints or prohibitions made

by or imposed under authority of law in so far as may be

necessary to enable such person to do anything authorized,

approved or required by such order.

34. The initial acquisition of a controlling interest in

TWA by Toolco was approved by the Board, under Sec-

tion 408 of the Civil Aeronautics Act of 1938, as consistent

with the public interest, in an opinion and order dated

October 17, 1944. Said order provided that such approval

would be effective so long as commercial transactions

between TWA and Toolco were limited to those involving

complete items of property the price of which did not ex-

ceed $200 each, with the further limitation that the total

annual expenditures involved in such commercial transac-

tions by either party should not exceed $10,000.

“95. In 1950 the Board approved under said Section 408

the farther acquisition of control of TWA by Toolco sub-

ject to the same conditions contained fn the aforesaid 1944

order. In so doing, the Board approved the exercise by

Tooleo of complete control over the business and affairs of

TWA, including equipment and financing, and found that

the continuing interest of Tooleo in TWA appeared essen-

tial to the best interest of the carrier and the public.

A-50

Toolco’s Answer and Counterclaims

36. Since the date of the Board’s 1944 order no com-

mercial transactions between Tooleo and TWA have taken

place except as authorized by said order or except after

a modification of said order upon a finding by the Board

under said Section 408 that the proposed transaction was

consistent with the public interest.

37. Tooleo from the time of its initial acquisition of an

interest in TWA has on various occasions assisted TWA

in acquiring flight equipment adequate to its needs and in

financing such flight equipment. TWA also acquired flight

equipment directly from various manufacturers without

assistance from Toolco. Orders of the Board specifically

approved as not inconsistent with the public interest all

transactions between TWA and Toolco with respect to the

acquisition or financing of flight equipment.

38. The complaint does not allege any violation of the

Federal Aviation Act of 1958 or of the orders of the Board

under Section 408 thereof.

39. The only act alleged in the complaint with respect

to the period prior to 1961 which was not specifically

approved by the Board was a proposal that Northeast be

merged with and into TWA. Such a merger,proposal was,

however, within the contemplation of the Board in approv-

ing control of TWA by Toolco. The merger proposal was,

moreover, specifically conditioned upon the approval of the

Board under the applicable provisions of the Federal Avia-

tion Act of 1958, including Section 408 thereof, and upon

approval by a majority of the stockholders of TWA other

than Tooleo voting at a meeting called to approve such a

merger.

40. In December, 1960, as a result of the demands and

unlawful activities of certain lending institutions and

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Toolco’s Answer and Counterclaims

others, Toolco was compelled to place in a voting trust the

shares of common stock of TWA which it owned. By

reason of such voting trust Toolco no longer controls TWA.

All of the activities of Toolco alleged in the complaint with

respect to the period subsequent to 1960 were taken on

the advice of counsel for Toolco solely for the purpose of

protecting Toolco’s interests as beneficiary under said

voting trust and as equitable owner of more than 78% of

the stock of TWA.

41. By reason of the facts herein alleged, this Court

lacks jurisdiction of the subject matter of the complaint

and over the subject matter of each alleged claim for

relief contained therein.

As any For a Fimst Counrerciam Acamst TWA ann

Agamsst Apprrionat Derenpants THe Equrrasre Lire

Assurance Society or THE Unrrep States, METROPOLITAN

Lire Insurance Company, Irvine Trust Company, DILLon,

Reap & Co. Inc., Ennest R. Brezon anp Cuartzs C.

TrLmeHast, JR.

42. Toolco is a corporation organized and existing under

the laws of the State of Delaware with its principal place

of business in Houston, Texas. All of its common stock is

owned by. Hughes, a leading aviator and aeronautical

engineer who for many years has been interested in the

development of commercial aviation in the United States.

43. Plaintiff TWA is a corporation organized and exist-

ing under the laws of the State of Delaware with its

principal executive offices in the City of New York. TWA

isand for many years has been the country’s third largest

domestic and second largest international air carrier. At

al times hereinafter mentioned from 1947 to December,

SS,

A-52

Toolco’s Answer and Counterclaims

1960, Tooleo owned a majority of TWA’s capital stock

and nominated a majority of TW4A’s directors. Since

December, 1960 Tooleo has been the equitable owner of in

excess of 78% of the capital stock of TWA which stock

was placed in a voting trust in December, 1960.

44. Additional defendants The Equitable Life Assurance

Society of the United States (hereinafter “Equitable”) and

Metropolitan Life Insurance Company (hereinafter “Met.

ropolitan”) are corporations organized and existing under

the laws of the State of New York with their principal

places of business in the City of New York. Metropolitan

is the country’s largest insurance company. with admitted

assets of’ approximately $17 billion. Equitable is the

country’s third largest insurance company with admitted

assets of approximately $10 billion. From 1947 to December,

1960 Equitable was the sole holder of TWA’s senior indebt-

edness other than bank debt. At all times since December,

1960 Equitable and Metropolitan have been the holders of

all such senior indebtedness of TWA.

45. Additional defendant Irving Trust Company (here-

inafter “Irving”) is a trust company organized and exist-

ing under the banking laws of the State of New York with

its principal place of business in the City of New York.

Irving is and for many years has been one of TWA’s prin-

cipal commercial bankers, has made loans and participated

with other lending institutions in making loans to TWA and

has undertaken on behalf of TWA to bring together lending

institutions for the purpose of participating in loans to

TWA. Irving for many years prior to 1961 maintained a

similar banking relationship with Toolco.

46. Additional defendant Ernest R. Breech (hereinafter

“Breech”) is, upon information and belief, a citizen of the

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Toolco’s Answer and Counterclaims

State of Michigan. From December, 1960, until his resigna-

tion on or about January 26, 1962, he was one of the two

voting trustees selected by Equitable and Metropolitan with

respect to 5,221,301 shares of TWA’s capital stock owned by

Tooleo which were placed in a voting trust in December

1960. Breech is and at all times since April 27, 1961 has

been the Chairman of the Board of Directors of TWA.

47. Additional defendant Charles C. Tillinghast, Jr.

(hereinafter “Tillinghast”), a citizen of the State of New

York, is and at all ‘times hereinafter mentioned since April

17, 1961, has been the president and chief executive officer

of TWA.

48, Additional defendant Dillon, Read & Co. Inc. (here-

inafter “Dillon Read”), on information and belief, is a cor-

poration organized and existing under the laws of the State

of New York with its principal place of business in the City

of New York. Dillon Read is engaged in the investment

banking business and is and since early 1959 has been the

principal financial adviser to TWA.

49. This counterclaim is asserted pursuant to Rule 13(a)

of the Federal Rules of Civil Procedure and arises out of

the subject matter of TWA’s claims herein.

50. In 1960 Equitable and Metropolitan, together with

a group of commercial banks headed by Irving, demanded

asa condition to their providing any financing to TWA that

Toolco place in a lender-controlled voting trust prior to any

default all shares of TWA stock which it owned. Such

financing was required by TWA in order for it to acquire

jet aircraft theretofore ordered by Toolco for the benefit of

TWA. In order to insure that such needed jet equipment

would be acquired by TWA and for reasons which included

the difficulty, if not impossibility, of obtaining such financ-

ing elsewhere, Toolco was compelled to yield to such

A-54

Toolco’s Answer and Counterclaims

demands but only upon the express agreement and under.

standing that: ;

(a) The Voting Trust would terminate upon the

repayment of the obligations in connection with

which it was created; and ,

(b) Tooleo would have the right to terminate the

Voting Trust by purchasing all such obligations at

the principal amount thereof together with accrued

interest and, in addition, by paying to Metropolitan

and Equitable a premium to be initially 22% of the

principal amount of such obligations acquired by

them.

51. Thereafter, in December 1960, pursuant to the

aforesaid agreement Tooleo, TWA, Equitable, Metropol-

itan, Irving and others entered into a series of transactions

for the financing of the acquisition of the jet flight equip-

ment ordered by Toolco for the benefit of TWA. In con-

nection therewith and the purchasé by Equitable and

Metropolitan of $92,800,000 principal amount of TWA’s

614% Equipment Mortgage Sinking Fund Notes due De.

cember 31, 1972 (hereinafter the “Series A Sinking Fund

Notes”) and the borrowing by TWA of $72,800,000 from

banks headed by Irving, which borrowing was evidenced

by 6% Equipment Mortgage Serial Notes ‘ue December

31, 1961—December 31, 1964 (hereinafter the “Series A

Serial Notes”), Tooleo, TWA, Equitable, Metropolitan,

Irving and others entered into a series of transactions and

agreements by which the 5,221,301 shares of TW4A’s con-

mon stock were placed in the Voting Trust and Metropol-

itan and Equitable designated Breech and Irving S. Olds

as two of the three voting trustees with respect to said

stock. By the terms of said agreements:

(a) Metropolitan and Equitable, as the holders

of a majority in principal amount of the Series A

Sinking Fund Notes and Series A Serial Notes,

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Toolco’s Answer and Counterclaims

acting through Irving as agent for the lenders, have,

and at all times since December, 1960, have had, the

absolute right and power to remove the two lender-

named voting trustees, or either of them, and to

designate and remove from time to time the suc-

cessor of either of said voting trustees.

(b) The Voting Trust is to continue, as to all

shares of TWA beneficially owned by Toolco, for a

period of 10 years from its inception, unless sooner

terminated in accordance with the terms of said

agreements; and Toolco ted, so long as it

- ghould be the owner of any vo trust certificates,

further to extend the Voting Trust, at the request

of Irving as agent, for such additional period not

exceeding the maximum period then permitted by

the law of Delaware as should be specified in such

request.

consent of Irving as agent acting at the direction of

the holders of a majority in amount of the Series A

Serial Notes and Series A Sinking Fund Notes, or

(ii) upon cancellation and discharge of the Indenture

of Mortgage securing said Notes, i.e., upon the pay-

ment or prepayment of said Notes, or (iii) upon the

exercise by Toolco of an option to purchase, after

December 31, 1961, all but not less than all of the

Series A Sinking Fund Notes and Series A Serial

Notes at a price equal to the principal amount thereof

plus accrued interest and, in addition thereto, a pre-

mium which is initially 22% of the principal amount

of the Series A Sinking Fund Notes, namely,

$20,416,000.

52. By reason of the agreements and transactions en-

tered into in December, 1960, and the Voting Trust then

created, Equitable and Metropolitan, together with other

landing institutions including Irving, acquired and now

poteess control over the business and affairs of TWA.

y have the right and power at any time to remove and

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Toolco’s Answer and Counterclaims

select a successor to either or both of the voting trustees

whom they have chosen. The majority voting trustees who

are thus subject to their control in turn have the absolute

right and power under the by-laws of TWA at any time to

reconstitute TWA’s Board of Directors without cause by

altering the number of directors, by removing the entire

Board of Directors at will, and subject to certain qualifica

tions, by removing one or more directors.. The majority

voting trustees have used the power so given to them to

reconstitute TWA’s Board of Directors and the members

of said Board of Directors as presently constituted have

been chosen in accordance with the wishes and with the

approval of Metropolitan and Equitable.

53. Since the creation of the Voting Trust and the re

constitution of TWA’s Board of Directors, TWA, Breech,

Tillinghast, Irving, Metropolitan, Equitable and Dillon

Read entered upon a course of conduct designed and caleu-

lated to prevent Toolco from regaining control of TWA,

to perpetuate the Voting Trust and to interfere with the

right of Toolco to terminate the Voting Trust in accordance

with the rights of Toolco to terminate the Voting Trust in

accordance with the terms of the agreements made in .

December 1960. Among the actions taken“in furtherance

of these objectives were the following:

(a) In or about March, 1961, Breech selected

Tillinghast to be TWA’s president and chief exect-

tive officer. Prior to his selection Tillinghast had

had no experience in the airline industry but he had

acted as counsel for a corporation of which Breech

was the chief executive officer. Upon information

and belief, prior to his acceptance of the presidency —

of TWA, Tillinghast consulted with Breech and

thereafter with representatives of Equitable, Metro-

politan and Irving as to steps which could be taken

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Toolco’s Answer and Counterclaims

to make it impossible for Toolco to terminate the

Voting Trust and regain control of TWA in the

foreseeable future and Dillon Read participated in

conversations and suggestions as to how Tillinghast

could be satisfied’ that Tooleco would be unable to

terminate the Voting Trust.

(b) Thereafter, TWA entered into an employ-

ment contract with Tillinghast pursuant to recom-

mendations made by Breech. This contract pro-

vides that Tillinghast will be employed as TWA’s

chief executive officer for a minimum of five years

upon terms such that upon his retirement or dis-

charge at any time following the termination of the

Voting Trust (or upon his retirement at any other

time after five years) he shall receive a pension for

ten years, said pension being in the amount of

$50,000 per year until he reaches age 65 and $30,000

per year thereafter. Tillinghast is now 50.

dent, TWA entered into agreements with Boeing

for the purchase of additional jet aircraft from

Boeing although, upon information and belief, the

number of such aircraft which TWA agreed to

acquire is in excess of TWA’s needs and financial

capabilities. The aggregate cost of such jet aircraft

and related equipment is in excess of $187,500,000.

In order to finance such purchases, TWA through

Dillon Read proposed to enter into agreements with

Metropolitan, Equitable and the banking group

headed by Irving to supply an additional $147,000,000

of senior debt. Metropolitan, Equitable and Irving

agreed to supply such financing only upon terms de-

signed and calculated to perpetuate the Voting Trust

and to preclude Toolco from regaining control of

A-58

Toolco’s Answer and Counterclaims

TWA in accordance with the agreements made in

December, 1960.

(d) In May 1961, Toolco learned of such proposed

action between TWA and the lending institutions

which control TWA. Toolco notified TWA, the vot

ing trustees and the lending institutions of its con-

cern at the self-dealing implicit in such negotiations.

Tooleo requested that it be informed as to the details

of the contemplated finarting of the Boeing pur.

chases. TWA refused to furnish such information

to it.

(e) Thereafter, in August 1961, TWA, upon in-

formation and belief, entered into agreements with

Metropolitan and Equitable and with Irving and its

associated banks, by the terms of which:

(i) TWA agreed to sell and Equitable and

Metropolitan agreed to purchase, subject to cer-

tain conditions, an aggregate of $107,000,000 prin-

cipal amount of additional sinking fund notes bear-

ing interest at 6% and maturing on December 1,

1977 (hereinafter the “Series B Sinking Fund

Notes”) ;

(ii) Irving and the banking group which it

headed agreed to lend to TWA, subjec

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