Business Notes AIRLINES

When Frank Lorenzo flew Eastern Airlines into bankruptcy court last year, he vowed to bring the carrier out stronger than ever. But strikebound Eastern has lost $1.2 billion since then, and Lorenzo has proved unable to reach an agreement with Eastern's creditors. To break the deadlock, a U.S. bankruptcy judge in Manhattan last week named airline-industry veteran Martin Shugrue to serve as trustee for the troubled Eastern. While Lorenzo's Texas Air company will continue to own Eastern, Lorenzo will have no say in the airline's management during the bankruptcy proceedings. Shugrue, 49, who will run the airline and explore the possibility of selling it, knows Lorenzo well. The airline tycoon last year forced Shugrue to resign from his post as president of Continental Airlines, the other wing of the Texas Air holding company. Members of the International Association of Machinists, who had been staunch enemies of Lorenzo, said they would seek immediate talks to end their 13-month walkout.