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As electronically filed with the Securities and Exchange Commission on
January 2, 1997
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Date of Report (Date of earliest event reported): NOVEMBER 26, 1996
ATLANTIC SOUTHEAST AIRLINES, INC.
(Exact name of registrant as specified in its charter)
GEORGIA 0-11097 58-1354495
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation) Identification No.)
100 HARTSFIELD CENTRE PARKWAY, SUITE 800, ATLANTA, GEORGIA 30354-1356
(Address of Principal Executive Office) (Zip Code)
Registrant's telephone number, including area code (404) 766-1400
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ITEM 5. OTHER EVENTS.
The Reorganization
After the close of business on December 31, 1996, Atlantic Southeast
Airlines, Inc. ("AIRLINES") completed a corporate reorganization that included
creation of a parent holding company for Airlines (the "REORGANIZATION").
At 11:59 p.m., Eastern Standard Time, December 31, 1996 (the
"EFFECTIVE TIME OF THE MERGER"), Airlines effected a merger (the "MERGER"),
with Atlantic Southeast Merging Co., a Georgia corporation ("MERGING CO.")
pursuant to an Amended and Restated Agreement and Plan of Merger dated November
6, 1996 (the "MERGER AGREEMENT"), by and among Airlines, ASA Holdings, Inc.
("ASA HOLDINGS"), and Merging Co. Upon the consummation of the Merger, (a)
each issued and outstanding share of Airlines' common stock, $0.10 par value
per share ("AIRLINES COMMON STOCK"), other than shares held by Airlines as
treasury shares, was automatically deemed converted into one share of ASA
Holdings' common stock, $0.10 par value per share ("HOLDINGS COMMON STOCK"),
(b) each issued and outstanding share of common stock of Merging Co. was
automatically deemed converted into one share of the surviving corporation,
Airlines, (c) the shares of Holdings Common Stock owned by Airlines before the
Merger were canceled and (d) the shares of Airlines Common Stock held by
Airlines as treasury shares before the Merger were canceled. Each of Airlines'
shareholders immediately before the Merger have exactly the same proportionate
interest in ASA Holdings after the consummation of the Merger as their
proportionate interest in Airlines immediately before the Merger.
Prior to the Merger, there was no public market for Holdings Common
Stock and Airlines Common Stock was traded on The Nasdaq Stock Market's
National Market under the symbol "ASAI." Upon the opening of the market after
the Effective Time of the Merger, Holdings Common Stock will be registered
under Section 12(g) of the Securities Exchange Act of 1934, as amended, and
will be traded on The Nasdaq Stock Market's National Market under the symbol
"ASAI." Airlines Common Stock will be simultaneously delisted from The Nasdaq
Stock Market's National Market. Airlines Common Stock will cease to be
registered under Section 12(g) of the Securities Exchange Act of 1934 and
Airlines will make all required filings with the Securities and Exchange
Commission to that effect.
Prior to the Reorganization, ASA Investments, Inc., a Delaware
corporation ("INVESTMENTS"), was a wholly owned subsidiary of Airlines. The
sole business of Investments has been to invest certain cash assets contributed
to it by Airlines. Before the Effective Time of the Merger, Investments
effected a dividend to Airlines of $20 million for liquidity purposes. After
the Effective Time of the Merger on December 31, 1996, Airlines effected a
dividend to ASA Holdings of all of the shares of capital stock of Investments
held by Airlines.
Airlines and Investments are now wholly owned subsidiaries of ASA
Holdings.
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NTSB Findings
On August 21, 1995, Airlines suffered a tragic loss when one of its
flights crashed. There were 26 passengers and three crew members on board that
flight. Of those individuals, there were nine fatalities (including one crew
member), 12 individuals either were not hospitalized or were released the day
after the crash with minor injuries and eight individuals were more seriously
injured. No one was injured or killed on the ground. The crash also caused
minor damage to a few trees adjacent to the pasture in which the plane came to
rest. Airlines had the crash site cleaned in accordance with the Environmental
Protection Agency's guidelines and regulations. Airlines has received
insurance proceeds from its insurance company related to the hull value of the
aircraft and the debt related to this aircraft was paid with part of these
insurance proceeds. A number of claims and lawsuits have been filed in
connection with this matter. The propeller manufacturer (through its insurer)
has agreed to address all claims arising from this accident without
acknowledging fault. Accordingly, Airlines management does not believe that
Airlines has any liability in this matter, based on factual information
currently available to it. Therefore, Airlines has not accrued a liability for
potential claims. Neither the propeller manufacturer or its insurer has
entered into any written indemnity agreement with Airlines or its insurer and
neither is legally obligated to indemnify either Airlines or its insurer for
expenses actually incurred in connection with the crash. In addition, Airlines
maintains insurance coverage which it believes, based on factual information
currently available to it, is sufficient to cover claims associated with this
incident if Airlines were found to be at fault.
On November 26, 1996, the National Transportation Safety Board (the
"NTSB") released the results of their investigation. The NTSB concluded that
the probable cause of the accident was the in-flight fatigue fracture and
separation of a propeller blade that resulted in excessive drag, loss of wing
lift and reduced directional control of the aircraft. The NTSB further
concluded that the fracture in the propeller blade was caused by a fatigue
crack from multiple corrosion pits that were not discovered by the propeller
manufacturer because of inadequate and ineffective corporate inspection and
repair techniques, training, documentation and communication. The NTSB also
determined that factors contributing to the accident included failure of the
propeller manufacturer and the Federal Aviation Administration ("FAA") to
require recurrent on-wing ultrasonic inspections for the affected propellers.
Finally, the NTSB concluded that (a) the flight crew was trained, certified and
qualified to conduct the flight, (b) the flight crew was in good health and
held the proper FAA medical certificates, (c) there was no evidence that the
performance of any crew member was impaired by alcohol, drugs or fatigue, (d)
the flight was conducted in accordance with applicable FAA regulations and
company requirements and (e) Airlines maintained the aircraft in accordance
with applicable FAA regulations and company operations specifications.
As a result of the investigation, the NTSB made several safety
recommendations to the FAA, including, without limitation, recommendations
regarding engineering, inspection, testing and repair of propeller blades.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant had duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: January 2, 1997
ATLANTIC SOUTHEAST AIRLINES, INC.
By: /s/ George F. Pickett
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George F. Pickett, Chairman of the Board
and Chief Executive Officer
(Principal Executive Officer)
