Committee to oversee Hawaiian bankruptcy
By Kelly Yamanouchi
Advertiser Staff Writer
The U.S. Trustees Office appointed a committee yesterday to represent creditors' interests in Hawaiian Airlines' Chapter 11 bankruptcy case.
The committee of unsecured creditors includes Richard Seltzer of the Air Line Pilots Association, John Bates of Starr Seigle Communications Inc., Sharon Levine of the International Association of Machinist and Aerospace Workers, James Donovan of Panda Travel, Edward Gilmartin of the Association of Flight Attendants and Thomas Goldberg of Pratt & Whitney.
The first meeting of creditors is scheduled for April 29.
Hawaiian Airlines filed for bankruptcy protection March 21, saying the move was intended to restart discussions on concessions from aircraft lessors, including Boeing Capital Corp. Hawaiian said it plans to continue business as usual.
Boeing filed a motion Monday requesting that a bankruptcy trustee replace Hawaiian management during Chapter 11 proceedings.
Louis DeArias, a partner with PricewaterhouseCoopers LLP who was retained by Boeing's law firm Perkins Coie LLP, submitted documents to the court in support of Boeing's motion claiming Hawaiian's $25 million stock buyback last year "may be considered a fraudulent transfer."
Hawaiian Airlines did not have an immediate response to DeArias' statement, but Hawaiian has disputed Boeing's claims and said the buyback was "legal and proper and publicly disclosed."
A fraudulent transfer in this situation may not be illegal, but would mean the transfer could be annulled. Boeing said it is concerned Hawaiian will not be able to successfully reorganize it if continues to operate under current management "and fails to recover the equity taken from it last year."
DeArias said Hawaiian may have been insolvent or close to insolvent in May 2002 when the stock buyback was announced and "may have left HA with unreasonably small capital to meet future obligations when due."
PricewaterhouseCoopers researched publicly-traded airlines to see if other carriers had executed a similar stock tender offer after Sept. 11, 2001. According to its findings, Atlantic Coast Airline Holdings and Mesa Air Group both repurchased shares in 2002 but their buybacks were smaller than Hawaiian's and at market prices rather than at a premium.
U.S. bankruptcy judge Robert J. Faris will hear Boeing's motion to appoint a trustee on May 6.
