(Reuters circulated the following story on October 7.)
NEW YORK — A labor union that has vocally opposed Texas financier David Bonderman’s presence on Continental Airlines’ board of directors called for his resignation Monday.
But Continental said experts determined it is legal for executives of Bonderman’s investment fund to sit on the board, though the airline’s chief executive recently said talk over whether the fund had conflicts of interest had become a distraction.
Bonderman runs private equity firm Texas Pacific Group, which helped pull Continental out of bankruptcy in the 1990s.
Texas Pacific, which often invests in distressed companies, holds a controlling stake in America West Airlines and courted US Airways during its bankruptcy.
The International Brotherhood of Teamsters said Monday it is concerned that Bonderman’s primary interests are not necessarily in the best interest of Continental shareholders.
Houston-based Continental’s CEO, Gordon Bethune, said last month that questions over whether Bonderman’s involvement with other airlines presented conflicts of interest had been distracting Continental’s workers and management.
But Continental issued a statement Monday evening lauding Bonderman’s contributions as a board member, and said an outside counsel hired by the airline’s board had determined that the fund’s representation on the board is legal.
Other sources have said reviews of the situation had showed there were no legal problems, and that the issue was only briefly mentioned at the airline’s recent board meeting.
Continental also said Texas Pacific Group recently assured the company that it is not considering investing in other sector competitors at this time.
A statement by the Teamsters, which represents about 3,000 workers at Continental, called for Bonderman’s resignation, and said the union is concerned about the recent sale of nearly all the Continental shares he had held directly or indirectly.
Bonderman sold about 704,000 Continental shares last month to settle a put option his family partnership had entered into more than two years ago.
A spokesman for Bonderman and Texas Pacific had no comment on the issue.