Intentions of Hawaiian Air trustee questioned
By Dan Nakaso
Advertiser Staff Writer
Hawaiian Airlines bankruptcy trustee Josh Gotbaum's successful effort yesterday to also become an employee and officer of the company drew a sharp rebuke from John Adams, former Hawaiian chief executive, who believes Gotbaum is "settling in for the long haul."
Instead of working to bring Hawaiian promptly out of bankruptcy, Adams said in a statement that he and his associates are "concerned that Mr. Gotbaum is more interested in staying on the job and accruing fees for himself than looking out for the interests of the stakeholders in Hawaiian Airlines, particularly the shareholders."
Adams' comments were the latest in a bankruptcy case that has spent considerable court time discussing Adams' motives, past actions and continuing interest in Hawai'i's largest airline.
Hawaiian filed for Chapter 11 bankruptcy protection in March and Adams was later stripped of control of Hawaiian Airlines by U.S. Bankruptcy Judge Robert Faris. Adams remains chairman and CEO of Hawaiian Airlines' parent company, Hawaiian Holdings Inc.
On Friday, Gotbaum sued Adams and companies he controls to recoup $28 million from a stock buyback program that benefited Adams and other shareholders even as Hawaiian was heading into financial trouble.
"We filed suit against John Adams because, in my view, he improperly diverted more than $20 million from Hawaiian that could help," Gotbaum said in a statement. "I think Mr. Adams' actions and comments since he was removed from the court should be interpreted in light of that lawsuit and the threat it represents to Mr. Adams and his investment group."
Yesterday Faris granted Gotbaum's request to become a Hawaiian Airlines officer and employee to get cockpit and airport security access, free air travel limited to company business and cheaper company health benefits.
Gotbaum's request was opposed by attorneys for American Airlines who said granting employee and officer status to a bankruptcy trustee sets a bad precedent and creates an appearance of a conflict of interest.
Representatives for the Air Line Pilots Association also said there was no explanation given for why Gotbaum would need to enter a cockpit.
They and others also argued that Gotbaum's health coverage should more appropriately be discussed at a hearing Jan. 23 when Faris will consider compensation for Gotbaum.
Gotbaum, who was appointed trustee in July, has proposed that he be paid $500 an hour, not to exceed 140 hours per month. He also has asked to be reimbursed for "the reasonable cost" of renting a single family home and automobile.
"While Mr. Gotbaum claims that Mr. Adams' salary of $600,000 was excessive, he is asking the court for $840,000 in base salary for himself to perform the same duties — and is leaving open the option to come back to court to ask for even more," Adams said in his statement. "We find this troubling."
Gotbaum also asked for similar compensation for John Monahan, Hawaiian's first bankruptcy trustee. Monahan worked three weeks — or 117.4 hours — before suddenly resigning in June, citing unexplained personal reasons.
Monahan should be compensated at a rate of $500 per hour, Gotbaum proposed, totaling $58,700.
Monahan re-emerged in October when he was named president of the Hawai'i Visitors and Convention Bureau. Monahan earns $235,000 a year with the possibility of a $117,500 annual bonus.
Reach Dan Nakaso at 525-8085 or dnakaso@honoluluadvertiser.com.
