Proposed Final Judgment and Competitive Impact Statement; United States v. Signature Flight Support Corp. et al.

DEPARTMENT OF JUSTICE

Antitrust Division

Proposed Final Judgment and Competitive Impact Statement; United

States v. Signature Flight Support Corp. et al.

Notice is hereby given pursuant to the Antitrust Procedures and

Penalties Act, 15 U.S.C. 16(b)-(h), that a proposed Final Judgment,

Hold Separate Stipulation and Order, Stipulation and Order, and

Competitive Impact Statement have been filed with the United States

District Court for the District of Columbia in United States v.

Signature Flight Support Corporation, et al., Civil Action No. 99-0537.

On March 1, 1999, the United States filed a Complaint alleging that the

proposed acquisition by Signature Flight Support Corporation

(``Signature'') of AMR Combs, Inc. (``Combs'') would violate section 7

of the Clayton Act, 15 U.S.C. 18. Signature and Combs own and operate

competing fixed base operators (``FBOs'') that provide flight support

services at various airports in the United States. The proposal Final

Judgment orders Signature to sell actual or planned FBO businesses at

Palm Springs Regional Airport, Bradley International Airport, and

Denver Centennial Airport, along with certain tangible and intangible

assets. Copies of the Complaint, Hold Separate Stipulation and Order,

Stipulation and Order, proposed Final Judgment, and Competitive Impact

Statement are available for inspection in Room 215 of the U.S.

Department of Justice, Antitrust Division, 325 Seventh Street, NW.,

Washington, DC 20530 and at the office of the Clerk of the United

States District Court for the District of Columbia, 333 Constitution

Avenue, NW., Washington, DC 20001. Copies of any of these materials may

be obtained upon request and payment of a copying fee.

Public comment is invited within 60-days of this notice. Such

comments, and responses thereto, will be published in the Federal

Register and filed with the Court. Written comments should be directed

to Roger W. Fones, Chief, Transportation, Energy, and Agriculture

Section, Antitrust Division, 325 Seventh Street, NW., Suite 500,

Washington, DC 20530 (telephone: (202) 307-6351).

Constance K. Robinson,

Director of Operations, Antitrust Division.

Hold Separate Stipulation and Order

It is hereby STIPULATED by and between the undersigned parties,

subject to approval and entry by the Court, That:

I. Definitions

As used in this Hold Separate Stipulation and Order:

A. ``Signature'' means Signature Flight Support Corporation, a

Delaware corporation with a principal place of business in Orlando,

Florida, and its successors and assigns, its parents, subsidiaries,

affiliates, and directors, officers, managers, agents, and employees

acting for or on behalf of any of them.

B. ``Combs'' means AMR Combs, Inc., a Delaware corporation

headquartered in Dallas, Texas, its successors, and assigns,

subsidiaries, affiliates, and directors, officers, managers, agents,

and employees acting for or on behalf of any of them. Combs is a wholly

owned subsidiary of AMR Corporation, A Delaware corporation that has

its principal place of business in Fort Worth, Texas, and is a party to

the agreement to sell Combs to Signature.

C. The ``Assets to be Divested'' means all rights, titles and

interests, including all fee, leasehold and real property rights, in

the PSP Assets, the BDI, Assets and the APA Assets;

1. The ``PSP Assets'' means all tangible and intangible assets

controlled by the existing Signature FBO at Palm Springs Regional

Airport, as described in Appendix A to the Final Judgment.

2. The ``BDL Assets'' means all tangible and intangible assets

controlled by the existing Combs FBO at Bradley International Airport,

as described in Appendix B to the Final Judgment, but does not include

the assets related to Combs' commercial jet fueling business, such as

the bulk storage facility and fuel farm.

3. The ``APA Assets'' means all tangible and intangible assets

controlled by the exiting Combs FBO at Centennial Airport, as described

in Appendix C to the Final Judgment.

D. ``APA Airport'' means Centennial Airport, located near Denver,

Colorado.

E. ``BDL Airport'' means Bradley International Airport, located

near Hartford, Connecticut.

F. ``PSP Airport'' means Palm Springs Regional Airport, located two

miles east of Palm Springs, California.

G. ``FBO'' means any or all services related to providing fixed

based operator services to general aviation customers, including, but

not limited to, selling fuel, leasing hangar, ramp, and office space,

providing flight support services, performing maintenance, providing

access to terminal facilities, or arranging for ancillary services such

as rental cars or hotels.

H. ``FBO Facility'' means any and all tangible and intangible

assets required to provide FBO services, including but not limited to

office terminal space, hangars, ramps, a general aviation fuel farm for

Jet A Fuel and aviation gas, and related fueling and maintenance

equipment.

I. ``SunBorne'' means SunBorne Development Corporation, a real

estate development company that conducts business in the Denver,

Colorado area.

J. ``SunBorne FBO Facility'' means the FBO facility that is to be

constructed at APA Airport by SunBorne Development Corporation. The

SunBorne FBO facility is to consist of (1) an office/terminal facility

to occupy the first floor (approximately 15,000 square feet) of a

three-story building to be constructed by SunBorne; (2) one 25,000

square foot hanger to be constructed by SunBorne; (3) a general

aviation fuel farm with storage for 40,000 gallons of Jet A fuel and

20,000 gallons of aviation gas to be constructed by Signature; and (4)

a 10.8 acre ramp.

K. ``SunBorne operator for the SunBorne FBO Facility'' means a

person who, with the approval of SunBorne and of the Arapahoe County

Public Airport Authority, will operate the SunBorne FBO Facility in

Signature's stead.

II. Objectives

The Final Judgment filed in this case is meant to ensure

Signature's prompt divestiture and sale of the BDL Assets, the PSP

Assets, and if necessary, the APA Assets, for the purpose of

maintaining viable competitors in the provision of FBO services at BDL

Airport, PSP Airport, and APA Airport. These actions will remedy the

effects that the United States alleges would otherwise result from

Signature's proposed acquisition of Combs.

This Hold Separate Stipulation and Order has two primary

objectives. With respect to the BDL Assets and the PSP Assets, it

ensures that, prior to such divestitures, each of the assets being

divested be maintained as independent economically viable, ongoing

business concerns, and that competition among FBO facilities at BDL

Airport and at PSP Airport is maintained during the pendency of the

divestitures. With

[[Page 14759]]

respect to the APA Assets, this Order permits Signature to conduct

business at APA Airport using the APA Assets, pending competition of a

new FBO facility at APA Airport (the SunBorne FBO Facility) that will

either be operated by Signature or by a substitute operator. If

Signature does not produce a substitute operator by a date set by the

Final Judgment, Signature must divest the APA Assets by a later date

set by the Final Judgment. This Order ensures that, prior to such

divestiture, the APA Assets be maintained and operated in a fashion

that preserves or improves their existing physical condition should

Signature be required to divest.

III. Hold Separate Provisions for the BDL Assets and the PSP Assets

Unit the divestiture required by the Final Judgment has been

accomplished;

A. Signature shall preserve, maintain, and operate the BDL Assets

and the PSP Assets as independent competitors with management, sales,

services, and operations held entirely separate, distinct and apart

from those of Signature. Signature shall not coordinate the marketing

or sale of services from the BDL Assets' and the PSP Assets' businesses

with the FBO businesses at BDL Airport and PSP Airport that Signature

will own as a result of the acquisition of Combs. Within twenty (20)

calendar days of the filing of the Complaint in this matter. Signature

will inform plaintiff of the steps taken to comply with this provision.

B. Signature shall take all steps necessary to ensure that the PSP

Assets and the BDL Assets will be maintained and operated as

independent, ongoing, economically viable and active competitors in the

sale of FBO services at PSP Airport and at BDL Airport: that the

management governing the PSP Assets and the BDL Assets will not be

influenced by Signature; and that the books, records, competitively

sensitive sales, marketing and pricing information, and decision-making

associated with the PSP Assets and the BDL Assets will be kept separate

and apart from the operations of Signature. Signature's influence over

the PSP Assets and the BDL Assets shall be limited to that necessary to

carry out Signature's obligations under this Order and the Final

Judgment. Signature may receive historical aggregate financial

information (excluding pricing information) relating to the PSP Assets

and the BDL Assets to the extent necessary to allow Signature to

prepare financial reports, tax returns, personnel reports, and other

necessary or legally required reports, and Signature shall use such

information only for such purposes.

C. Signature shall use all reasonable efforts to maintain service

levels at the FBO operations that represent the PSP Assets and the BDL

Assets, and shall maintain, promotional advertising sales, technical

assistance, marketing and merchandising support for the PSP Assets and

the BDL Assets at current or previously approved levels, whichever are

higher.

D. Signature shall provide and maintain sufficient working capital

to maintain the PSP Assets and the BDL Assets as economically viable,

ongoing businesses.

E. Signature shall provide and maintain sufficient lines and

sources of credit to maintain the PSP Assets and the BDL Assets as

economically viable, ongoing businesses.

F. Signature shall take all steps necessary to ensure that the PSP

Assets and the BDL Assets are fully maintained and are in operable

condition at no lower than current service capabilities, and shall

maintain and adhere to normal repair and maintenance schedules for the

PSP Assets and the BDL Assets.

G. Signature shall not, except as part of a divestiture approved by

plaintiff, remove, sell, lease, assign, transfer, pledge or otherwise

dispose of or pledge as collateral for loans, any PSP Assets or any BDL

Assets.

H. Signature shall maintain, in accordance with sound accounting

principles, separate, true, accurate and complete financial ledgers,

books and records that report, on a periodic basis, such as the last

business day of every month, consistent with past practices, the

assets, liabilities, expenses, revenues, income, profit and loss of the

PSP Assets and the BDL Assets.

I. Until such time as the PSP Assets and the BDL Assets are

divested, except in the ordinary course of business or as is otherwise

consistent with this Order. Signature shall not hire, transfer or

terminate, or alter, to the detriment of any employee, any current

employment or salary agreements for any employees who on the date of

the signing of this Agreement work on the sites where the PSP Assets or

the BDL Assets are located.

V. Provisions for the APA Assets

Until the divestiture required by the Final Judgment has been

accomplished:

A. Signature shall use all reasonable efforts to maintain service

levels at the FBO operations that constitute the APA Assets, and shall

maintain, promotional, advertising sales, technical assistance,

marketing and merchandising support for the APA Assets at current or

previously approved levels, whichever are higher.

B. Signature shall provide and maintain sufficient working capital

to maintain the APA Assets as an economically viable, ongoing business.

C. Signature shall provide and maintain sufficient lines and

sources of credit to maintain the APA Assets as an economically viable,

ongoing business.

D. Signature shall take all steps necessary to ensure that the APA

Assets are fully maintained and in operable condition at no lower than

its current service capabilities, and shall maintain and adhere to

normal repair and maintenance schedules for the APA Assets.

E. Signature shall not, except as part of a divestiture approved by

plaintiff, remove, sell, lease, assign, transfer, pledge or otherwise

dispose of or pledge as collateral for loans, any APA Assets.

F. Until such time as the APA Assets are divested, except in the

ordinary course of business or as is otherwise consistent with this

Order, Signature shall not hire, transfer or terminate, or alter, to

the detriment of any employee, any current employment or salary

agreements for any employees, who on the date of the signing of this

Agreement work on the site where the APA Assets are located.

G. Signature shall maintain, in accordance with sound accounting

principles, separate, true, accurate and complete financial ledgers,

books and records that report on a periodic basis, such as the last

business day of every month, consistent with past practices, the

assets, liabilities, expenses, revenues, income, profit and loss of the

APA Assets.

VI. Other Provisions

Until the divestiture required by the Final Judgment has been

accomplished:

A. Signature shall take no action that would interfere with the

ability of any trustee(s) appointed pursuant to the Final Judgment to

complete the divestiture pursuant to the Final Judgment to suitable

purchasers.

B. This Hold Separate Stipulation and Order shall remain in effect

until the divestitures required by the Final Judgment are complete, or

until further Order of the Court.

Respectfully submitted,

[[Page 14760]]

For Plaintiff United States of America.

Nina B. Hale,

Salvatore Massa,

Attorneys, U.S. Department of Justice, Antitrust Division,

Transportation, Energy, and Agriculture Section, 325 Seventh Street,

NW., Suite 500, Washington, DC 20530, (202) 307-6351.

For Defendant Signature Flight Support Corporation.

Bruce Van Allen,

President and Chief Operating Officer.

For Defendants AMR Combs, Inc. and AMR Corporation.

Eugene A. Burrus,

Esquire, AMR Corporation, P.O. Box 619616, MD 5675, Dallas Forth Worth

Airport, TX 75261, (817) 967-1252.

Dated: March 2, 1999.

So Ordered:

Thomas F. Hogan for Judge Royce C. Lamberth,

United States District Judge.

Stipulation and Order

It is stipulated by and between the undersigned parties, by their

respective attorneys, as follows:

1. The Court has jurisdiction over the subject matter of this

action and over each of the parties hereto, and venue of this action is

proper in the United States District Court of the District of Columbia;

2. The parties stipulate that a Final Judgment in the form hereto

attached may be filed and entered by the Court, upon the motion of any

party or upon the Court's own motion, at any time after compliance with

the requirements of the Antitrust Procedures and Penalties Act (15

U.S.C. Sec. 16), and without further notice to any party or other

proceedings, provided that plaintiff has not withdrawn its consent,

which it may do at any time before the entry of the proposed Final

Judgment by serving notice thereof on defendants and by filing that

notice with the Court;

3. Defendant Signature (as defined in paragraph II.A of the

proposed Final Judgment attached hereto) shall abide by and comply with

the provisions of the proposed Final Judgment pending entry of the

Final Judgment, or until expiration of time for all appeals of any

court ruling declining entry of the proposed Final Judgment, and shall,

from the date of the signing of this Stipulation, comply with all the

terms and provisions of the proposed Final Judgment as though the same

were in full force and effect as an order of the Court; provided,

however, that Signature shall not be obligated to comply with Sections

V through VIII of the proposed Final Judgment unless and until the

closing of any transaction in which Signature directly or indirectly

acquires all or any part of the assets or capital stock of Combs (as

defined in paragraph II.B of the proposed Final Judgment attached

hereto);

4. Defendants shall not consummate the transaction before the Court

has signed this Stipulation and Order as well as the Hold Separate

Stipulation and Order;

5. In the event plaintiff withdraws its consent, as provided in

paragraph 2 above, or in the event the proposed Final Judgment is not

entered pursuant to this Stipulation, the time has expired for all

appeals of any court ruling declining entry of the proposed Final

Judgment, and the Court has not otherwise ordered continued compliance

with the terms and provisions of the proposed Final Judgment, then the

parties are released from all further obligations under this

Stipulation, and the making of this Stipulation shall be without

prejudice to any party in this or any other proceeding;

6. The defendant Signature represents that the divestitures ordered

in the proposed Final Judgment can and will be made, and that the

defendant Signature will later raise no claims of hardship or

difficulty as grounds for asking the Court to modify any of the

divestiture provisions contained therein.

Dated: March 1, 1999.

For Plaintiff United States of America:

Nina B. Hale,

Salvatore Massa,

Attorneys, U.S. Department of Justice, Antitrust Division,

Transportation, Energy, and Agriculture Section, 325 Seventh Street,

N.W., Suite 500, Washington, D.C. 20530, (202) 307-6351.

For Defendant Signature Flight Support Corporation.

William Norfolk, Esq.,

Sullivan & Cromwell, 125 Broad Street, New Yor, New York 10004, 212-

558-3512.

For Defendants AMR Combs, Inc. and AMR Corporation

Eugene A. Burrus, Esq.,

AMR Corporation, P.O. Box 619616, MD 5675, Dallas Fort Worth Airport,

TX 75261, (817) 967-1252.

Final Judgment (Proposed)

Whereas, plaintiff, the United States of America (``United

States''), filed its complaint in this action on March 1, 1999, and

plaintiff and defendants, Signature Flight Support Corporation

(``Signature''), AMR Combs, Inc. (``Combs'') and AMR Corporation, by

their respective attorneys, having consented to the entry of this Final

Judgment without trial or adjudication of any issue of fact or law

herein, and without this Final Judgment constituting any evidence

against or an admission by any party with respect to any issue of law

or fact herein;

And Whereas, defendants have agreed to be bound by the provisions

of this Final Judgment pending its approval by the Court;

And Whereas, the essence of this Final Judgment is prompt and

certain divestiture of certain fixed based operator facilities to

assure that competition is not substantially lessened;

And Whereas, plaintiff requires defendant Signature to make certain

divestitures for the purpose of remedying the loss of competition

alleged in the Complaint;

And Whereas, defendants have represented to plaintiff that the

divestitures ordered herein can and will be made, and that defendants

will later raise no claims of hardship or difficulty as grounds for

asking the Court to modify any of the divestitures or provisions

contained below;

Now, Therefore, before taking of any testimony, and without trial

or adjudication of any issue of fact or law herein, and upon consent of

the parties hereto, it is hereby Ordered, adjudged, and decreed as

follows:

I. Jurisdiction

This Court has jurisdiction over the subject matter of this action

and over each of the parties in this action. The Complaint states a

claim upon which relief may be granted against the defendants, as

defined below, under Section 7 of the Clayton Act, as amended (15

U.S.C. Sec. 18).

II. Definitions

As used in this Final Judgment:

A. ``Signature'' means Signature Flight Support Corporation, a

Delaware corporation with a principal place of business in Orlando,

Florida, and its successors and assigns, its parents, subsidiaries,

affiliates, and directors, officers, managers, agents, and employees

acting for or on behalf of any of them.

B. ``Combs'' means AMR Combs Inc., a Delaware corporation

headquartered in Dallas, Texas, as well as its successors, assigns,

subsidiaries, affiliates, and directors, officers, managers, agents,

and employees acting for or on behalf of any of them. Combs is a wholly

owned subsidiary of AMR Corporation, a Delaware corporation with its

principal place of business in Fort Worth, Texas, and is a party to the

agreement to sell Combs to Signature.

[[Page 14761]]

C. ``APA Airport'' means Centennial Airport, located near Denver,

Colorado.

D. ``BDL Airport'' means Bradley International Airport, located

near Hartford, Connecticut.

E. ``PSP Airport'' means Palm Springs Regional Airport, located two

miles east of Palm Springs, California.

F. The ``Assets to be Divested'' means all rights, titles and

interests, including all fee, leasehold and real property rights, in

the PSP Assets, the BDL Assets, and the APA Assets, as defined below:

1. The ``PSP Assets'' means all tangible and intangible assets

controlled by the existing Signature FBO at Palm Springs Airport, as

described in Appendix A.

2. The ``BDL Assets'' means all tangible and intangible assets

controlled by the existing Combs FBO at Bradley International Airport,

as described in Appendix B, but does not include the assets related to

Combs' commercial jet fueling business, such as the bulk fuel storage

facility and the fuel farm.

3. The ``APA Assets'' means all tangible and intangible assets

controlled by the existing Combs FBO at Denver Centennial Airport, as

described in Appendix C.

G. ``FBO'' means any or all services related to providing fixed

based operator services to general aviation customers, including, but

not limited to, selling fuel, leasing hangar, ramp, and office space,

providing flight support services, performing maintenance, providing

access to terminal facilities, or arranging for ancillary services such

as rental cars or hotels.

H. ``FBO Facility'' means any and all tangible and intangible

assets required to provide FBO services, including but not limited to

office/terminal space, hangars, ramps, a general aviation fuel farm for

Jet A Fuel and aviation gas, and related fueling and maintenance

equipment.

I. ``SunBorne'' means SunBorne Development Corporation, a real

estate development company doing business in the Denver, Colorado area.

J. ``SunBorne FBO Facility'' means the FBO facility that is to be

constructed at APA Airport by SunBorne. The SunBorne FBO facility is to

consist of (1) an office/terminal facility to occupy the first floor

(approximately 15,000 square feet) of a three-floor building to be

constructed by SunBorne; (2) one 25,000 square foot hangar to be

constructed by SunBorne; (3) a general aviation fuel farm with storage

for 40,000 gallons of Jet A fuel and 20,000 gallons of aviation gas to

be constructed by Signature; and (4) a 10.8 acre ramp.

K. ``Substitute operator for the SunBorne FBO Facility'' means a

person who, with the approval of SunBorne and of the Arapahoe County

Public Airport Authority, will operate the SunBorne FBO Facility in

Signature's stead.

III. Applicability

A. The provisions of this Final Judgment apply to defendants, their

successors and assigns, their subsidiaries, affiliates, directors,

officers, managers, agents, and employees, and all other persons in

active concert or participation with any of them who shall have

received actual notice of this Final Judgment by personal service or

otherwise.

B. Signature shall require, as a condition of the sales or other

disposition(s) of all or substantially all of the Assets to be

Divested, that the acquiring party or parties agree to be bound by the

provisions of this Final Judgment.

IV. The SunBorne FBO Facility

A. Signature shall have until September 1, 1999, to find a

substitute operator for the SunBorne FBO Facility that is acceptable to

the United States in its sole discretion. The United States, in its

sole discretion, may extend the time period for finding a substitute

operator by an additional period of time not to exceed thirty (30)

calendar days.

V. Divestiture of the Assets

A. Signature is hereby ordered and directed in accordance with the

terms of this Final Judgment, within one hundred eighty (180) calendar

days after the filing of the Complaint in this matter, or five (5) days

after notice of entry of this Final Judgment by the Court, whichever is

later, to divest the PSP Assets and the BDL Assets as ongoing

businesses to purchasers acceptable to the United States in its sole

discretion. With respect to any of the PSP Assets and the BDL Assets to

be divested in which Signature holds a leasehold interest, Signature

must transfer the entire leasehold including all renewal or option

rights.

B. In addition to divesting the PSP Assets and the BDL Assets,

Signature shall provide to the purchaser of the BDL Assets (which

includes all successors, assigns, parents, subsidiaries, affiliates,

and directors, officers, managers, agents, and employees acting for or

on behalf of the purchaser) the option of access to the existing Combs

jet fuel bulk storage facility and fuel farm for two years. In the

event that the purchaser exercises this option, such access shall be

limited to the storage and delivery of the purchaser's owned Jet A fuel

for use at the BDL Assets. To the extent Signature charges the

purchaser of the BDL Assets for access, the service charge shall be

commercially reasonable and shall be no greater than the fee Signature

charges any other customer for the same types of services associated

with such access.

C. In the event that Signature does not find a substitute operator

for the SunBorne FBO Facility by the date set forth in Paragraph A of

Section IV. Signature is hereby ordered and directed in accordance with

the terms of this Final Judgment, by June 1, 2000, or within 10 (ten)

calendar days after receipt of a certificate of occupancy by SunBorne

Development Corporation for the SunBorne FBO facility, whichever is

sooner, to divest the APA Assets as an ongoing business to a purchaser

acceptable to the United States in its sole discretion. With respect to

any of the APA Assets in which Signature holds a leasehold interest,

Signature must transfer the entire leasehold including all renewal or

option rights.

D. Signature shall use its best efforts to facilitate the

completion of the SunBorne FBO Facility.

E. Signature shall not take any action, direct or indirect, that

will impede in any way the completion of the SunBorne FBO Facility.

F. The plaintiff may, in its sole discretion, relieve Signature of

the obligation to divest the APA Assets based on the plaintiff's

assessment of changed circumstances relating to the completion of the

SunBorne FBO Facility.

G. Signature shall use its best efforts to accomplish each of the

divestitures as expeditiously and timely as possible. The United

States, in its sole discretion, may extend the time period for any of

the divestitures in order to accommodate mandatory municipal, county,

state or federal review.

H. In accomplishing each of the divestitures order by this Final

Judgment. Signature promptly shall make known, by usual and customary

means, the availability of each of Assets to be Divested described in

the Final Judgment. Signature shall inform any person making any

inquiry regarding a possible purchase that the sales are being made

pursuant to this Final Judgment and provide such person with a copy of

this Final Judgment. Signature shall also offer to furnish to all

prospective purchasers, subject to customary confidentiality

assurances, all information regarding the Assets to be Divested

customarily provided in a due diligence process, except such

information subject to attorney-client

[[Page 14762]]

privilege or attorney work-product privilege. Signature shall make

available such information to the plaintiff at the same time that such

information is made available to any other person.

I. Signature shall not interfere with any negotiations by any

purchaser to employ any employee who works at any of the Assets to be

Divested, or whose principal responsibility is operating or managing

any of the Assets to be Divested.

J. Signature shall permit prospective purchasers of each of the

Assets to be Divested to have reasonable access to personnel and to

make such inspection of each of the Assets to be Divested; access to

any and all environmental, zoning, and other permit documents and

information; and access to any and all financial, operational, or other

documents and information customarily provided as part of a due

diligence process.

K. Signature shall not take any action, direct or indirect, that

will impede in any way the operation or value of the Assets to be

Divested.

L. Unless the United States otherwise consents in writing, the

divestitures pursuant to Section V, or by a trustee appointed pursuant

to Section VI of this Final Judgment, shall include all of the Assets

to be Divested, operated in place pursuant to the Hold Separate

Stipulation and Order, and be accomplished by selling or otherwise

conveying all of the Assets to be Divested to purchasers in such a way

as to satisfy the United States, in its sole discretion, that each of

the Assets to be Divested can and will be used by the purchasers as

part of viable, ongoing businesses engaged in providing FBO services at

PSP Airport, at BDL Airport, and at APA Airport. Each of the

divestitures, whether pursuant to Section V or Section VI of this Final

Judgment, shall be made to purchasers for whom it is demonstrated to

the United States' sole satisfaction that: (1) The purchasers have the

capability and intent of competing effectively in the provision of FBO

services at PSP Airport, at BDL Airport, and at APA Airport; (2) the

purchasers have or soon will have the managerial, operational, and

financial capability to compete effectively in the provision of FBO

services at PSP Airport, BDL Airport, and APA Airport; and (3) none of

the terms of any agreement between the purchasers and Signature gives

Signature the ability unreasonable to raise the purchasers' costs, to

lower the purchasers' efficiency, or otherwise to interfere in the

ability of the purchasers to complete effectively.

VI. Appointment of Trustee

A. In the event that Signature has not divested all of the Assets

to be Divested within the times specified in Section V of this Final

Judgment, the Court shall appoint, on application of the United States,

a trustee selected by the United States to effect the divestitures of

those Assets to be Divested that have not been timely divested.

B. After the appointment of a trustee becomes effective, only that

trustee shall have the right to sell the particular Assets to be

Divested (i.e., APA Assets, PSP Assets, and/or BDL Assets). The trustee

shall have the power and authority to accomplish the divestiture(s) at

the best price then obtainable upon a reasonable effort by the trustee,

subject to the provisions of Sections V and VII of this Final Judgment,

and shall have such other powers as the Court shall deem appropriate.

Subject to Section VI(C) of this Final Judgment, the trustee shall have

the power and authority to hire at the cost and expense of Signature

any investment bankers, attorneys, or other agents reasonably necessary

in the judgment of the trustee to assist in the particular

divestiture(s), and such professionals and agents shall be accountable

solely to the trustee. The trustee shall have the power and authority

to accomplish the particular divestiture(s) at the earliest possible

time to purchaser(s) acceptable to the United States in its sole

discretion and shall have such other powers at this Court shall deem

appropriate. Signature shall not object to a sale by trustee on any

grounds other than the trustee's malfeasance. Any such objections by

Signature must be conveyed in writing to plaintiff and the trustee

within ten (10) days after the trustee has provided the notice required

under Section VII of this Final Judgment.

C. A trustee shall serve at the cost and expense of Signature, on

such terms and conditions as the Court may prescribe, and shall account

for all monies derived from the sale of the assets sold by the trustee

and all costs and expenses so incurred. After approval by the Court of

the trustee's accounting, including fees for its services and those of

any professionals and agents retained by the trustee, all remaining

money shall be paid to Signature and the trust shall then be

terminated. The compensation of the trustee and of professionals and

agents retained by the trustee shall be reasonable in light of the

value of each of the divested businesses and based on a fee arrangement

providing the trustee with an incentive based on the price and terms of

the particular divestiture(s) and the speed with which it is

accomplished.

D. Signature shall use its best efforts to assist the trustee in

accomplishing the required divestiture(s), including its best efforts

to effect all necessary regulatory approvals. The trustee and any

consultants, accountants, attorneys, and other persons retained by the

trustee shall have full and complete access to the personnel, books,

records, and facilities of the Assets to be Divested, and Signature

shall develop financial or other information relevant to the Assets to

be Divested customarily provided in a due diligence process as the

trustee may reasonably request, subject to customary confidentiality

assurances. Signature shall permit prospective acquirers of each of the

Assets to be Divested to have reasonable access to personnel and to

make such inspection of physical facilities and any and all financial,

operational or other documents and other information as may be relevant

to the divestitures required by this Final Judgment.

E. After its appointment, the trustee shall file monthly reports

with the parties and the Court setting forth that trustee's efforts to

accomplish the particular divestiture(s) ordered under this Final

Judgment; provided however, that to the extent such reports contain

information that the trustee deems confidential, such reports shall not

be filed in the public docket of the Court. Such reports shall include

the name, address and telephone number of each person who, during the

preceding month, made an offer to acquire, expressed an interest in

acquiring, entered into negotiations to acquire, or was contacted or

made an inquiry about acquiring, any interest in any of the Assets to

be Divested, and shall describe in detail each contact with any such

person during this period. The trustee shall maintain full records of

all efforts made to divest the particular Assets to be Divested.

F. If the trustee has not accomplished such divestiture(s) within

six (6) months after its appointment, the trustee thereupon shall file

promptly with the Court a report setting forth: (1) The trustee's

efforts to accomplish the required divestiture(s), (2) the reasons, in

the trustee's judgment, why the required divestiture(s) have not been

accomplished, and (3) the trustee's recommendations; provided, however,

that to the extent such reports contain information that the trustee

deems confidential, such reports shall not be filed in the public

docket of the Court. The trustee shall at the same time furnish such

reports to the parties, who shall each have the right to be heard and

[[Page 14763]]

to make additional recommendations consistent with the purpose of the

trust. The Court shall enter thereafter such orders as it shall deem

appropriate in order to carry out the purpose of the trust, which may,

if necessary, include extending the trust and the term of the trustee's

appointment for a period requested by the United States.

VII. Notification

Within two (2) business days following execution of a definitive

agreement contingent upon compliance with the terms of this Final

Judgment to effect, in whole or in part, the proposed divestitures

pursuant to Sections V or VI of this Final Judgment, Signature or a

trustee, whichever is then responsible for effecting the particular

divestiture(s), shall notify plaintiff of the proposed divestiture(s).

If a trustee is responsible, the trustee shall similarly notify

Signature. The notice shall set forth the details of the proposed

transaction and list the name, address, and telephone number of each

person not previously identified who offered to, or expressed an

interest in or a desire to, acquire any ownership interest in the

particular Assets to be Divested that is the subject of the definitive

agreement, together with full details of same. Within fifteen (15)

calendar days of receipt by plaintiff of such notice, the United

States, in its sole discretion, may request from Signature, the

proposed purchaser(s), or any other third party additional information

concerning the proposed divestiture(s) and the proposed purchaser(s).

Signature and the trustee shall furnish any additional information

requested from them within fifteen (15) calendar days of the receipt of

the request, unless the parties shall otherwise agree. Within thirty

(30) calendar days after receipt of the notice or within twenty (20)

calendar days after the plaintiff has been provided the additional

information requested from Signature, the proposed purchaser(s), or any

third party, whichever is later, the United States shall provide

written notice to Signature and the trustee, if there is one, stating

whether or not it objects to the proposed divestiture(s). If the United

States provides written notice to Signature and the trustee that it

does not object, then the divestiture(s) may be consummated, subject

only to Signature's limited right to object to the sales under Section

VI(B) of this Final Judgment. Absent written notice that the United

States does not object to the proposed purchaser or upon objection by

the United States, none of the divestitures proposed under Section V or

Section VI shall be consummated. Upon objection by Signature under the

provision in Section VI(B), a divestiture proposed under Section VI

shall not be consummated unless approved by the Court.

VIII. Affidavits

A. Within twenty (20) calendar days of the filing of the Complaint

in this matter and every thirty (30) calendar days thereafter until the

divestiture has been completed whether pursuant to Section V or Section

VI of this Final Judgment, Signature shall deliver to plaintiff an

affidavit as to the fact and manner of compliance with Section V or

Section VI of this Final Judgment. Each such affidavit shall include,

inter alia, the name, address, and telephone number of each person who,

at any time after the period covered by the last such report, made an

offer to acquire, expressed an interest in acquiring, entered into

negotiations to acquire, or was contacted or made an inquiry about

acquiring, any interest in each of the Assets to Divested, and shall

describe in detail each contact with any such person during that

period. Each such affidavit shall also include a description of the

efforts that Signature has taken to solicit buyer(s) for each of the

Assets to be Divested and to provide required information to

prospective purchasers, including the limitations, if any, on such

information.

B. Within twenty (20) calendar days of the filing of the Complaint

in this matter, Signature shall deliver to plaintiff an affidavit which

describes in detail all actions Signature has taken and all steps

Signature has implemented on an on-going basis to preserve each of the

Assets to be Divested pursuant to Section IX of this Final Judgment and

the Hold Separate Stipulation and Order entered by the Court. Relating

to the PSP Assets and the BDL Assets, the affidavit also shall

describe, but not be limited to, Signature's efforts to maintain and

operate each of those Assets to be Divested as active competitors,

maintain the management, staffing, research and development activities,

sales, marketing, and pricing of each of those Assets to be Divested,

and maintain the PSP and BDL FBO facilities in operation condition at

current capacity configurations. Relating to the APA Assets, the

affidavit shall describe, but not be limited to, Signature's efforts to

maintain the management, staffing, research and development activities,

sales, marketing, and pricing of the APA Assets, and maintain the APA

FBO facility in an operable condition at current capacity

configurations. Signature shall deliver to plaintiff an affidavit

describing any changes to the efforts and actions outlined in

Signature's earlier affidavit(s) filed pursuant to Section VIII(B)

within fifteen (15) calendar days after the change is implemented.

C. Until one year after each divestiture has been completed,

Signature shall preserve all records of all efforts made to preserve

the Assets to be Divested and effect the divestitures.

IX. Hold Separate Order

Until the divestitures required by the Final Judgment have been

accomplished. Signature shall take all steps necessary to comply with

the Hold Separate Stipulation and Order entered by this Court.

Signature shall take no action that would jeopardize the divestiture of

any of the Assets to Be Divested.

X. Financing

Signature is ordered and directed not to finance all or any part of

any purchase by an acquirer made pursuant to Sections V or VI of this

Final Judgment.

XI. Compliance Inspection

For the purpose of determining or securing compliance with this

Final Judgment, and subject to any legally recognized privilege, from

time to time:

A. Duly authorized representatives of the United States Department

of Justice, upon written request of the Attorney General or the

Assistant Attorney General in charge of the Antitrust Division, and on

reasonable notice to Signature made to its principal offices, shall be

permitted:

1. Access during office hours of Signature to inspect and copy all

books, ledgers, accounts, correspondence, memoranda, and other records

and documents in the possession or under the control of Signature, who

may have counsel present, relating to any matters contained in this

Final Judgment and the Hold Separate Stipulation and Order; and

2. Subject to the reasonable convenience of Signature and without

restraint or interference from them, to interview, either informally or

on the record, its officers, employees, and agents, who may have

counsel present, regarding any such matters.

B. Upon the written request of the Attorney General or of the

Assistant Attorney General in charge of the Antitrust Division, made to

Signature at its principal offices, Signature shall submit such written

reports, under oath if requested, with respect to any of the matters

contained in this Final Judgment and the Hold Separate Stipulation and

Order.

[[Page 14764]]

C. No information nor any documents obtained by the means provided

in Sections VIII or XI of this Final Judgment shall be divulged by a

representative of the United States to any person other than a duly

authorized representative of the Executive Branch of the United States,

except in the course of legal proceedings to which the United States is

a party (including grand jury proceedings), or for the purpose of

securing compliance with this Final Judgment, or as otherwise required

by law.

D. If at the time information or documents are furnished by any of

the defendants to plaintiff, any of the defendants represents and

identifies in writing the material in any such information or documents

for which a claim of protection may be asserted under Rule 26(c)(7) of

the Federal Rules of Civil Procedure, and marks each pertinent page of

such material, ``Subject to claim of protection under Rule 26(c)(7) of

the Federal Rules of Civil Procedure,'' then plaintiff shall give ten

(10) days notice to the defendant(s) prior to divulging such material

in any legal proceeding (other than a grand jury proceeding) to which

that defendant is not a party.

XII. Retention of Jurisdiction

Jurisdiction is retained by this Court for the purpose of enabling

any of the parties to this Final Judgment to apply to this Court at any

time for such further orders and directions as may be necessary or

appropriate for the construction or carrying out of this Final

Judgment, for the modification of any of the provisions hereof, for the

enforcement of compliance herewith, and for the punishment of any

violations hereof.

XIII. Termination

Unless this Court grants an extension, this Final Judgment will

expire on the tenth anniversary of the date of its entry.

XIV. Public Interest

Entry of this Final Judgment is in the public interest.

Dated:-----------------------------------------------------------------

----------------------------------------------------------------------

United States District Judge

Appendix A--PSP Assets

``PSP Assets'' means all rights, titles, and interests,

including all fee, leasehold and real property rights, in the

following assets owned or controlled by Signature that are used by

Signature to provide fuel or other services to general aviation

customers at PSP Airport.

1. The existing 8,000 square foot Signature terminal and office

buildings.

2. Approximately 21,000 square feet of hangar space, consisting

of the existing Signature hangar buildings and approximately 30,000

square feet of space prepared for hangar use.

3. The existing Signature above-ground fuel farm consisting of

two 20,000 gallon Jet A fuel tanks and one 12,000 gallon avgas tank

with fuel separator sump system that is adjacent to the t-hangars.

4. Approximately 40,000 square feet of ramp space adjacent to

the foregoing buildings.

5. All equipment and supplies necessary and appropriate to

support a viable FBO business at the foregoing facilities, including

but not limited to, existing office furniture, lobby furniture,

phone system, radios, televisions, towing equipment, golf carts,

pickup trucks, refuellers, and ground power units.

6. Contracts (including, but not limited to, customer contracts)

and customer lists related to this location.

7. Approximately 2.5 acres of parking space.

Appendix B--BDL Assets

``BDL Assets'' means all rights, titles, and interests,

including all fee, leasehold and real property rights, in the

following assets owned or controlled by Combs that are used by Combs

to provide fuel or other services to general aviation customers at

BDL Airport.

1. The existing Combs terminal and office buildings.

2. Approximately 50,000 square feet of hangar space, consisting

of the existing Combs hangar buildings: One 30,000 square foot

hangar (Hangar 214); one 20,000 square foot hangar (Storage Hangar).

3. The existing Combs avgas tank, located adjacent to the

commercial airline services building.

4. Approximately 366,000 square feet of ramp space adjacent to

the foregoing buildings.

5. All equipment and supplies necessary and appropriate to

support a viable FBO business at the foregoing facilities, including

but not limited to, existing office furniture, lobby furniture,

phone system, radios, televisions, towing equipment, golf carts,

pickup trucks, refuellers, ground power units.

6. Contracts (including, but not limited to, customer contracts)

and customer lists related to this location.

7. Approximately .9 acres of parking space.

Appendix C--APA Assets

``APA Assets'' means all rights, titles, and interests,

including all fee, leasehold and real property rights, in the

following assets owned or controlled by Combs that are used by Combs

to provide fuel or other services to general aviation customers at

APA Airport.

1. The existing Combs terminal and office buildings.

2. Approximately 40,000 square feet of hangar space, consisting

of the existing Combs hangar buildings: one hangar of 20,000 square

feet (Hangar 9); one hangar of 20,000 square feet (Hangar 10).

3. The existing Combs fuel farm consisting of two 12,000 gallon

Jet A tanks and one 10,000 gallon avgas tank located \1/4\ mile from

the executive terminal between Peoria Street and Dove Valley

Parkway.

4. Approximately 1,000,000 square feet of ramp space adjacent to

the foregoing buildings.

5. All equipment and supplies necessary and appropriate to

support a viable FBO business at the foregoing facilities, including

but not limited to, existing office furniture, lobby furniture,

phone system, radios, televisions, towing equipment, golf carts,

pickup trucks, refuellers, and ground power units.

6. Contracts (including, but not limited to, customer contracts)

and customer lists related to this location.

7. Approximately 5 acres of parking space.

Competitive Impact Statement

The United States, pursuant to Section 2(b) of the Antitrust

Procedures and Penalties Act (``APPA''), 15 U.S.C. 16(b)-(h), files

this Competitive Impact Statement relating to the proposed Final

Judgment submitted for entry in this civil antitrust proceeding.

I. Nature and Purpose of the Proceeding

On March 1, 1999, the United States filed a Complaint alleging that

the proposed acquisition by Signature Flight Support Corporation

(``Signature'') of the flight support operations of AMR Combs, Inc.

(``Combs''), a wholly owned indirect subsidiary of AMR Corporation,

would violate Section 7 of the Clayton Act, 15 U.S.C. 18.

The Complaint alleges that Signature and Combs own and operate

fixed base operator (``FBO'') businesses at various airports around the

country. Combs owns and operates eleven FBOs in the United States,

including FBOs at Palm Springs Regional Airport (``PSP Airport''),

Bradley International Airport (``BDL Airport''), and Denver Centennial

Airport (``APA Airport''). The Complaint alleges that Signature and

Combs are the only two providers of FBO services for general aviation

customers at PSP Airport, located two miles east of Palm Springs,

California, and BDL Airport, located near Hartford, Connecticut. the

Complaint further alleges that the proposed acquisition will create a

monopoly for Signature at those two airports, giving it significant

power to raise prices and lower the quality of service. Thus, the

proposed acquisition would have likely lessened competition

substantially in the market for FBO services at PSP Airport and BDL

Airport in violation of Section 7 of the Clayton Act, as amended, 15

U.S.C. 18.

The Complaint also alleges that the proposed acquisition would deny

general aviation customers at APA Airport, where there are currently

two

[[Page 14765]]

competing FBOs, the benefits of additional competition at the airport.

In 2000, when a new FBO facility is built, Signature was to enter the

market as the third FBO. The likely benefits to general aviation

customers at APA Airport from competition among three FBOs would have

been increased choice and lower prices for fuel and hangar rentals.

Signature's proposed acquisition of the Combs FBO at APA Airport would

have eliminated the likelihood of anticipated additional competition

because entry by a different FBO is not likely. Signature is one of

only a few firms positioned to make the necessary commitment for a

start-up operation on the scale desired by the airport board.

Accordingly, Signature's proposed acquisition would have lessened

potential competition in the market for FBO services at APA Airport in

violation of Section 7 of the Clayton Act, as amended, 15 U.S.C. 18.

The prayer for relief in the Complaint seeks: (1) a judgment that

the proposed acquisition would violate Section 7 of the Clayton Act;

and (2) a preliminary and permanent injunction preventing Signature and

Combs from consummating the proposed acquisition.

At the same time the Complaint was filed, the United States also

filed a proposed settlement that would permit Signature to complete its

acquisition of Combs, but requires divestitures that would preserve

competition for general aviation customers at PSP Airport and at BDL

Airport. With regard to APA Airport, the proposed settlement would

require a divestiture unless another firm replaces Signature as the

operator of the new FBO facility, thereby preserving the potential for

competition among three FBOs for general aviation customers at APA

Airport.

This settlement consists of a Hold Separate Stipulation and Order

(``Hold Separate Order''), and a proposed Final Judgment. The proposed

Final Judgment orders Signature to sell the FBO assets at two of the

airport--PSP Airport and BDL Airport--to purchasers who have the

capability to compete effectively in the provision of FBO services to

general aviation customers at those airport. Signature will divest the

existing Signature assets located at PSP (``the PSP Assets''). At BDL

Airport, Signature will divest the existing Combs assets except for

Combs' interests in a bulk jet fuel storage facility and a fuel farm,

which is located in different parts of the airport from the Combs FBO

facility (``the BDL Assets''). Signature must complete the divestitures

of the PSP Assets and the BDL Assets before the later of one hundred

and eighty (180) calendar days after filing of the Complaint, or five

(5) days after entry of the Final Judgment, in accordance with the

procedures specified in the proposed Final Judgment. If Signature

should fail to accomplish the divestitures, a trustee appointed by the

Court would be empowered to divest these assets.

With regard to APA Airport, the proposed Final Judgment takes into

account two facts: the third FBO facility has not yet been built and

Signature would occupy it as a tenant of the builder, a real estate

developer called SunBorne Development Company (``SunBorne'').

Accordingly, the proposed settlement permits Signature to occupy and

operate the existing Combs FBO Facility at APA Airport (``the APA

Assets'') pending SunBorne's construction of the new FBO. Within ten

days of presentation of a certificate of occupancy for the new FBO or

June 1, 2000, whichever is sooner, Signature must divest the APA Assets

and move into the new FBO facility, unless Signature has found a

suitable firm to operate the new FBO facility in its stead.

The Hold Separate Order and the proposed Final Judgment also impose

a hold separate agreement that requires defendant Signature to ensure

that, until the divestitures mandated by the Final Judgment have been

accomplished, the PSP Assets and the BDL Assets will be held separate

and apart from, and operated independently of, Signature's other FBO

assets and businesses. Similarly, the Hold Separate Order and the

proposed Final Judgment require Signature to ensure that, if

divestiture of the APA Assets is required, no steps will be taken that

would denigrate their value.

The parties have stipulated that the proposed Final Judgment may be

entered after compliance with the APPA. Entry of the proposed Final

Judgment would terminate this action, except that the Court would

retain jurisdiction to construe, modify, or enforce the provisions of

the proposed Final Judgment and to punish violations thereof.

II. Events Giving Rise to the Alleged Violation

A. The Parties and the Proposed Transaction

On December 14, 1998, Signature, AMR Services Holding Corp., and

AMR Corporation (the parent of AMR Combs, Inc., and AMR Services

Holding Corp.) entered into an agreement under which Signature would

seek to acquire all of the capital stock of Combs for approximately

$170 million.

Signature is a wholly owned subsidiary of BBA Group PLC, a British

holding company. Signature is a Delaware corporation with its principal

place of business in Orlando, Florida. Signature operates a nationwide

network of forty-two FBOs throughout the United States, including

facilities at PSP Airport and BDL Airport.

Combs is a wholly owned, indirect subsidiary of AMR Corporation,

which is a Delaware corporation with its principal place of business in

Forth Worth, Texas. Combs is a Delaware corporation, headquartered in

Dallas, Texas. It owns and operates eleven FBOs throughout the United

States, including ones at PSP Airport, BDL Airport, and APA Airport.

Combs also manages two FBOs in Mexico and is an equity partner in an

executive aviation center in Hong Kong.

B. The FBO Services Market

FBOs are facilities located at airports that provide flight support

services, including aircraft fueling, ramp and hangar rentals, office

space rentals, and other services to general aviation customers.

General aviation customers include charter, private and corporate

aircraft operators, as distinguished from scheduled commercial

airlines.

FBOs sell aircraft fuel, as well as related support services such

as ramp, hangar and office space rental. The largest source of revenues

for an FBO is its fuel sales. FBOs sell Jet A fuel for jet aircraft,

turboprops and helicopters, and avgas for smaller, piston driven

planes. FBOs do not charge separately for many services offered to

general aviation customers, such as use of customer and pilot lounges,

baggage handling, and flight planning support, rather, they recover the

costs for these services in the price that they charge for fuel. FBOs

do charge separately for certain services, such as hangar rental,

office space rental, ramp parking fees, catering, cleaning the

aircraft, arranging ground transportation and maintenance on the

aircraft. General aviation customers generally buy fuel from the same

FBO from which they obtain those other services.

The Complaint alleges that the provision of FBO services to general

aviation customers at each of the airports--PSP Airport, BDL Airport,

and APA Airport--is a relevant market (i.e., a line of commerce and a

section of the country) under Section 7 of the Clayton Act. General

aviation customers cannot obtain fuel, hangar, ramp and other services

offered at PSP Airport, BDL Airport, or APA Airport, except through an

FBO authorized to sell such products and services by the local airport

[[Page 14766]]

authority. Thus, general aviation customers have no alternatives to

FBOs for these products and services when they land at PSP Airport, BDL

Airport, or APA Airport.

The Complaint also alleges that FBOs at other airports would not

provide economically practical alternatives for general aviation

customers who currently use PSP Airport, BDL Airport, and APA Airport.

Although there are other airports in the same regions as PSP Airport,

BDL Airport, and APA Airport, those other airports are not economically

viable substitutes for passengers flying into PSP Airport, BDL Airport,

or APA Airport. General aviation customers use PSP Airport, BDL

Airport, or APA Airport because of the airport's location, convenience

and facilities. General aviation customers have selected these airports

in part because of their proximity to their ultimate destination

(whether their residence, business or other place); using a different

airport would significantly increase their driving time, reducing the

convenience of maintaining a corporate jet. There are not enough

general aviation customers who have selected PSP Airport, BDL Airport,

or APA Airport as their airport who would switch to other airports to

prevent anticompetitive price increases for fuel and other services at

PSP Airport, BDL Airport, or APA Airport.

C. Competition Between Signature and Combs

1. PSP Airport and BDL Airport. Signature and Combs are direct

competitors in the provision of FBO services to general aviation

customers at PSP Airport and BDL Airport. As the only two FBOs at PSP

Airport and BDL Airport, Signature and Combs compete over price and

service packages. General aviation customers have benefited from

competition between Signature and Combs at PSP Airport and BDL Airport,

receiving lower prices and improved FBO services. The acquisition would

eliminate this competition, creating a monopoly in the market for FBO

services to general aviation customers at PSP Airport and at BDL

Airport.

The prospect of new entry is not likely to check Signature's

resulting ability to raise prices or reduce service. The financial

opportunity that would be created by the anticompetitive effect of this

merger would not be great enough to induce a new entrant to make the

investments needed to enter the FBO business at PSP Airport and BDL

Airport. There are significant sunk costs involved in building an FBO,

including the cost of building hangar and ramp facilities. The revenue

a new FBO operation would have to generate to achieve an acceptable

rate of return on such an investment exceeds the revenues a new entrant

would likely earn. In particular, a new entrant would have to achieve a

large enough share of market revenues to be able to cover the fixed

(including sunk) costs of entry and be profitable at pre-merger prices.

And, the airport authorities' minimum operating standards, which

require an FBO to provide other services beyond hangar rental, fueling

and maintenance, effectively raise the minimum viable scale of entry,

making entry even more difficult. Therefore, new FBO entry on a scale

sufficient to prevent a post-merger price increase is not likely to

occur at PSP Airport and BDL Airport.

2. APA Airport. The market for FBO services at APA Airport is

presently highly concentrated, with only two FBOs competing. Prior to

its proposed acquisition of Combs, Signature was poised to enter as a

third independent competitor early in 2000 when a new FBO facility is

to be competed. In September of 1998, Signature signed a detailed

letter of intent with SunBorne, the real estate developer, to enter as

the tenant operator of an FBO facility at APA Airport in 2000.

For general aviation consumers, the addition of a third,

independent FBO at APA Airport would increase consumer choice and would

have likely resulted in increased price and quality competition to the

benefit of general aviation customers at APA Airport.

Signature's acquisition of Combs significantly lessens the

potential for competition among three FBOs at APA Airport. Entry by a

different firm that would be the third independent FBO is not likely

because Signature was one of only a few firms positioned to make the

necessary commitment for a start-up operation.

D. Anticompetitive Consequences of the Acquisition

The Complaint alleges that Signature's acquisition of Combs would

result in FBO monopolies at PSP Airport and at BDL Airport. The

Complaint further alleges that Signature's acquisition of the Combs FBO

at APA Airport would deprive general aviation customers of the benefits

of additional competition from having three independent FBOs, rather

than just two.

The Complaint alleges that the acquisition of Combs by Signature

would substantially lessen competition and restrain trade unreasonably.

The transaction would have eliminated actual competition between

Signature and Combs in the market for FBO services at PSP Airport and

BDL Airport, resulting in an increase in prices for fuel and other FBO

services. In addition, potential competition at APA Airport would be

substantially lessened, and prices for fuel and other FBO services sold

to general aviation customers at APA Airport would not decrease.

III. Explanation of the Proposed Final Judgment

The United States brought this action because the effect of the

acquisition of Combs by Signature may be substantially to lessen

competition, in violation of Section 7 of the Clayton Act, in the

markets for FBO services provided to general aviation customers at PSP

Airport, BDL Airport, and APA Airport.

A. PSP Airport and BDL Airport Provisions

The risk to competition posed by this acquisition at PSP Airport

and BDL Airport, however, would be eliminated if certain assets,

leases, and agreements currently held by Signature or Combs to operate

their PSP Airport and BDL Airport FBO businesses were sold and assigned

to a purchaser that could operate them as an active, independent and

financially viable competitor. To this end, the provisions of the

proposed Final Judgment are designed to accomplish the sale and

assignment of certain assets and leaseholds to such a purchaser and

thereby prevent the anticompetitive effects of the proposed

acquisition.

Section V of the proposed Final Judgment requires defendant

Signature, within one hundred and eighty (180) calendar days after

filing of the Complaint in this matter, or within five (5) days after

notice of entry of the Final Judgment by the Court, whichever is later,

to divest an FBO business at PSP Airport and an FBO business at BDL

Airport, as set out in Section II.C (i.e., the PSP Assets and the BDL

Assets) of the proposed Final Judgment. Unless the United States

otherwise consents in writing, Signature is required to divest its

present FBO business at PSP Airport, including all hangars, ramp and

office space, fuel farms, and any related terminal and maintenance

facilities located on the property it presently leases as well as any

other leases or options on leases it possesses at PSP Airport.

At BDL Airport, Signature is required to divest Combs's present FBO

operation, including all hangars, ramp and office space, and any

related terminal and maintenance facilities located on the property

Combs presently

[[Page 14767]]

leases, as well as any other leases or options on leases Combs

possesses at BDL Airport. Combs does not have a jet fuel farm at its

FBO location. It obtains fuel for its general aviation customers from

its fuel farm located at BDL Airport's commercial terminal. Combs's

fuel farm serves predominantly commercial aviation customers, and

Combs's commercial fueling business is separate from its FBO business.

The proposed Final Judgment requires Signature, which will own the fuel

farm after the acquisition, to provide the purchaser of the Combs FBO

business with non-discriminatory and unlimited access to the fuel farm

at the commercial terminal for a minimum of two years. Access will be

limited to the storage and delivery of the purchaser's owned Jet A fuel

for FBO use at BDL Airport. Signature may charge the purchaser a

commercially reasonable access charge that is not greater than what it

charges others for the costs associated with the purchaser's use of the

facilities. Of course, the purchaser of the Combs FBO business is free

to build its own fuel farm (which it could do in relatively short

amount of time for a moderate cost), or it may negotiate a longer term

access agreement with Signature.

B. APA Airport Provisions

The risk to competition posed by this acquisition at APA Airport

would be eliminated if the likelihood of entry by a third, independent

FBO remains the same after the transaction as it was before. This could

be accomplished in one of two ways: (1) Signature could go ahead with

its plan to be the operator of the new FBO upon its completion, and

sell the existing Combs FBO business (``the APA Assets'') to a

purchaser that could operate it as an independent and financially

viable competitor; or (2) Signature could find a firm willing to

operate the new FBO instead of Signature, in which case, Signature

could operate the existing Combs business.

Accordingly, Section IV of the proposed Final Judgment gives

Signature until September 1, 1999, to find a substitute operator for

the new FBO facility. If Signature is unsuccessful, Section V of the

proposed Final Judgment requires Signature to move into the new FBO

facility and divest the APA Assets no later than June 1, 2000, or

within ten days of receiving a certificate of occupancy from SunBorne.

Section V further provides that if circumstances relating to the

completion of the new FBO change, the United States may, in its

discretion, relieve Signature of the obligation to sell the APA Assets.

As a result of the obligations imposed on Signature, and the

divestiture required by the proposed Final Judgment, general aviation

customers at APA Airport will be able to reap the benefits of three

competing FBOs in 2000.

C. General Divestiture Provisions

For each of the required divestitures, Signature shall divest such

equipment and supplies as is necessary and appropriate to operate a

viable FBO at PSP Airport, BDL Airport, and APA Airport. Signature

shall transfer its contracts, including customer contracts, and

customer lists, for providing FBO services at each airport. Together

with the equipment, supplies and customer contracts and lists, and the

commitment to access to the fuel farm at BDL Airport at a reasonable

price, these assets will give qualified purchasers the means to

establish themselves as competitive alternatives to Signature. Thus, as

a result of the divestitures required by the proposed Final Judgment,

general aviation consumers at PSP Airport and BDL Airport will continue

to have a choice between two competitive FBOs, and at APA Airport, the

likelihood of their having three competing FBOs has been maintained.

Under the proposed Final Judgment, Signature must take all

reasonable steps necessary to accomplish quickly the divestitures of

the PSP Assets, the BDL Assets, and the APA Assets, and shall cooperate

with prospective purchasers by supplying all information relevant to

the proposed sales. Should Signature fail to complete any of its

divestitures within the required time periods, the Court will appoint,

pursuant to Section VI, a trustee to accomplish the divestitures. The

United States will have the discretion to delay the appointment of the

trustee in order to permit other governmental review (such as the

county or municipal airport authority).

Following the trustee's appointment, only the trustee will have the

right to sell the divestiture assets, and defendant Signature will be

required to pay for all of the trustee's sale-related expenses. The

trustee's compensation will be structured to provide an incentive for

the trustee to obtain the highest price for the assets to be divested,

and to accomplish the divestitures as quickly as possible.

Section VII of the proposed Final Judgment would assure the United

States an opportunity to review any proposed sale, whether by Signature

or by the trustee, before it occurs. Under this provision, the United

States is entitled to receive complete information regarding any

proposed sale or any prospective purchaser prior to consummation. Upon

objection by the United States to a sale of any of the divestiture

assets by the defendant Signature, any proposed divestiture may not be

completed. Should the United States object to a sale of any of the

divested assets by the trustee, that sale shall not be consummated

unless approved by the Court.

Pursuant to Section VI.F, should the trustee not accomplish the

divestitures within six months of appointment, the trustee and the

parties will make a recommendation to the Court, which shall enter such

orders as it deems appropriate to carry out the purpose of the trust,

which may include extending the term of the trustee's appointment.

Under Section IX of the proposed Final Judgment, defendant

Signature must take certain steps to ensure that, until the required

divestitures have been completed, the PSP Assets and the BDL Assets

will be maintained as separate, ongoing, viable FBO businesses and kept

distinct from Signature's other FBO operations. Until such

divestitures, Signature must also continue to maintain and operate the

divestiture assets as viable, independent competitors as PSP Airport

and BDL Airport, using all reasonable efforts to maintain sales of FBO

services to general aviation customers at PSP Airport and BDL Airport.

Until the divestiture, Signature must maintain and operate the APA

Assets as a viable entity, using all reasonable efforts to maintain its

sales of FBO services to general aviation customers at APA Airport.

Signature must maintain all three FBO businesses at PSP Airport, BDL

Airport, and APA Airport, so that they continue to be stable, including

maintaining all records, loans, and personnel for their operation.

Section XI requires the Signature to make available, upon request,

the business records and the personnel of its businesses. This

provision allows the United States to inspect Signature's facilities

and ensure that Signature is complying with the requirements of the

proposed Final Judgment. Section XIII of the proposed Final Judgment

provides that it will expire on the tenth anniversary of its entry by

the Court.

IV. Remedies Available to Potential Private Litigants

Section 4 of the Clayton Act, 15 U.S.C. 15, provides that any

person who has been injured as a result of conduct prohibited by the

antitrust laws may bring suit in federal court to recover three times

the damages the person has suffered, as well as costs and reasonable

[[Page 14768]]

attorney's fees. Entry of the proposed Final Judgment will neither

impair nor assist the bringing of any private antitrust damage action.

Under the provisions of Section 5(a) of the Clayton Act, 15 U.S.C.

16(a), the proposed Final Judgment has no prima facie effect in any

subsequent private lawsuit that may be brought against the defendants.

V. Procedure for Commenting on the Proposed Final Judgment

The United States and defendants have stipulated that the proposed

Final Judgment may be entered by the Court after compliance with the

provisions of the APPA, provided that the United States has not

withdrawn its consent. The APPA conditions entry upon the Court's

determination that the proposed Final Judgment is in the public

interest.

The APPA provides a period of at least sixty (60) days preceding

the effective date of the proposed Final Judgment within which any

person may submit to the United States written comments regarding the

proposed Final Judgment. Any person who wishes to comment should do so

within sixty (60) days of the date of publication of this Competitive

Impact Statement in the Federal Register. The United States will

evaluate and respond to the comments. All comments will be given due

consideration by the Department of Justice, which remains free to

withdraw its consent to the proposed Final Judgment at any time prior

to entry. The comments and the response of the United States will be

filed with the Court and published in the Federal Register.

Written comments should be submitted to: Roger W. Fones, Chief,

Transportation, Energy & Agriculture Section, Antitrust Division, 325

Seventh Street, N.W., Suite 500, Washington, D.C. 20530.

VI. Alternatives to the Proposed Final Judgment

The United States considered, as an alternative to the proposed

Final Judgment, a full trail on the merits of its Compliant against

Signature and Combs. The Unites States is satisfied, however, the

divestitures of the assets and other relief contained in the proposed

Final Judgment will preserve viable competition in the provisions of

FBO services to general aviation customers at PSP Airport, BDL Airport,

and APA Airport that otherwise would be affected adversely by the

acquisition. Thus, the compliance with the proposed Final Judgment and

the completion of the sale required by the Judgment would achieve the

relief the government would have obtained through litigation, but

avoids the time, expense, and uncertainty of a full trial on the merits

of the government's Complaint.

VII. Standard of Review Under the APPA for Proposed Final Judgment

The APPA requires that proposed consent judgments in antitrust

cases brought by the United States be subject to a sixty (60) day

comment period, after which the court shall determine whether entry of

the proposed Final Judgment ``is in the public interest.'' In making

that determination, the court may consider--

(1) the competitive impact of such judgment, including

termination of alleged violations, provisions for enforcement and

modification, duration or relief sought, anticipated effects of

alternative remedies actually considered, and any other

considerations bearing upon the adequacy of such judgment;

(2) the impact of entry of such judgment upon the public

generally and individuals alleging specific injury from the

violations set forth in the complaint including consideration of the

public benefit, if any, to be derived from a determination of the

issues at trail.

15 U.S.C. 16(e). As the United States Court of Appeals for the D.C.

Circuit has held, this statute permits a court to consider, among other

things, the relationship between the remedy secured and the specific

allegations set forth in the government's complaint, whether the decree

is sufficiently clear, whether enforcement mechanisms are sufficient,

and whether the decree may positively harm third parties. See United

States v. Microsoft, 56 F.3d 1448, 1461-62 (D.C. Cir 1995).

In conducting this inquiry, ``the court is nowhere compelled to go

to trial or to engage in extended proceedings which might have the

effect of vitiating the benefits of prompt and less costly settlement

through the consent decree process.'' \1\ Rather,

\1\ 119 Cong. Rec. 24598 (1973). See United States v. Gillette

Co., 406 F. Supp. 713, 715 (D. Mass. 1975). A ``public interest''

determination can be made properly on the basis of the Competitive

Impact Statement and Response to comments filed pursuant to the

APPA. Although the APPA authorizes the use of additional procedures,

15 U.S.C. Sec. 16(f), those procedures are discretionary. A court

need not invoke any of them unless it believes that the comments

have raised significant issues and that further proceedings would

aid the court in resolving those issues. See H.R. Rep. 93-1463, 93rd

Cong. 2d Sess. 8-9 reprinted in (1974) U.S. Code Cong. & Ad News

6535, 6538.

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absent a showing of corrupt failure of the government to discharge

its duty, the Court, in making its public interest finding, should *

* * carefully consider the explanations of the government in the

competitive impact statement and its responses to comments in order

to determine whether those explanations are reasonable under the

circumstances.

United States v. Mid-America Dairymen, Inc., 1977-1 Trade Cas. para.

61,508, at 71,980 (W.D. Mo. 1977).

Accordingly, with respect to the adequacy of the relief secured by

the decree, a court may not ``engage in an unrestricted evaluation of

what relief would best serve the public.'' United States v. BNS, Inc.,

858 F.2d 456, 462 (9th Cir. 1988), quoting United States v. Bechtel

Corp., 648 F.2d 660, 666 (9th Cir.), cert. denied, 454 U.S. 1083

(1981); see also Microsoft, 56 F.3d at 1460-62. Precedent requires that

the balancing of competing social and political interest affected by

a proposed antitrust consent decree must be left, in the first

instance, to the discretion of the Attorney General. The court's

role in protecting the public interest is one of insuring that the

government has not breached its duty to the public in consenting to

the decree. The court is required to determine not whether a

particular decree is the one that will best serve society, but

whether the settlement is ``within the reaches of the public

interest.'' More elaborate requirements might undermine the

effectiveness of antitrust enforcement by consent decree.\2\

\2\ United States v. Bechtel, 648 F.2d at 666 (citations

omitted) (emphasis added); see United States v. BNS, Inc., 858 F.2d

at 463; United States v. National Broadcasting Co., 449 F. Supp.

1127, 1143 (C.D. Cal. 1978); United States v. Gillette Co., 406 F.

Supp. at 716; see also Microsoft, 56 F.3d at 1461 (whether ``the,

remedies [obtained in the decree are] so inconsonant with the

allegations charged as to fall outside of the `reaches of the public

interest.' '') (citations omitted).

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The proposed Final Judgment, therefore, should not be reviewed

under a standard of whether it is certain to eliminate every

anticompetitive effect of a particular practicular practice or whether

in mandates certainty of free competition in the future. Court approval

of a final judgment requires a standard more flexible and less strict

than the standard required for a finding of liability. ``[A] proposed

decree must be approved even if it falls short of the remedy the court

would impose on its own, as long as it falls within the range of

acceptability or is `within the reaches of public interest.' (citations

omited.).'' \3\

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\3\ United States v. American Tel. and Tel. Co., 552 F.Supp.

131, 150 (D.D.C. 1982), aff'd sub nom, Maryland v. United States,

460 U.S. 1001 (1983), quoting United States v. Gillette Co., Supra,

406 F.Supp. at 716; United States v. Alcan Alumninum, Ltd., 605

F.Supp. 619, 622 (W.D. Ky. 1985)

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VIII. Determinative Materials and Documents

There are no materials or documents that the United States

considered to be determinative in formulating this proposed Final

Judgment. Accordingly,

[[Page 14769]]

none are being filed with this Competitive Impact Statement.

Dated: March 15, 1999.

Respectfully submitted,

Nina B. Hale,

Salvatore Massa,

Trial Attorneys, U.S. Department of Justice, Antitrust Division,

Transportation, Energy and Agriculture Section, Suite 500, 325 Seventh

Street, NW., Washington, DC 20530, (202) 307-6351.

[FR Doc. 99-7288 Filed 3-25-99; 8:45 am]

BILLING CODE 4410-11-M