Bankruptcy trustee resigns

By Dan Nakaso
Advertiser Staff Writer

After just three weeks on the job, John Monahan abruptly resigned yesterday as trustee overseeing Hawaiian Airlines' bankruptcy, effective immediately.

MONAHAN

U.S. Trustee Steven Jay Katzman, who appointed Monahan, said he hopes to have a replacement selected by week's end. A new trustee would have to be approved by a federal bankruptcy judge and could be on the job as early as next week, Katzman said.

Hawaiian filed for Chapter 11 bankruptcy reorganization in March amid accusations of financial mismanagement against its chairman and CEO.

"I can't opine as to whether (Monahan's resignation) will be a setback as to Hawaiian's ability to get itself out of bankruptcy," Katzman said. "I can tell you that his resignation has nothing to do with his job performance."

Curtis Ching, trial attorney for the Office of Trustee, said Monahan's resignation "sincerely is for personal reasons. It has nothing to do with his abilities, his qualifications, his work thus far. He was putting together a team of professionals and a business plan."

Monahan did not return telephone calls seeking comment.

He said in a statement that "I have enjoyed my brief association with the people of Hawaiian Airlines and will miss the opportunity to be a part of what I'm confident will be a successful reorganization of the airline."

Monahan, who has four children, graduated in 1972 from Brigham Young University with a bachelor of science in business management. He spent 15 years in retail management with the Scottsdale, Ariz.-based Goldwater's department store chain. He moved on to the May Co. in Los Angeles, where he was regional vice president of stores.

He joined Liberty House in 1990 and served as chief operating officer before taking over in 1997. He oversaw Liberty House, later acquired by Macy's, during its three-year bankruptcy and left to start his own consulting business in Hawai'i.

Monahan's selection as trustee for Hawaiian Airlines was approved May 30, and he began the job June 2.

Even though he had no airline experience, Monahan's name had been on a list of trustee candidates submitted by the Official Committee of Unsecured Creditors and another list provided by Boeing Capital Corp., one of the companies that leases planes to Hawaiian and is a major creditor.

Both groups had urged appointment of a trustee after alleging that Hawaiian's chairman and CEO John Adams had mismanaged the company.

Monahan's selection took two weeks. But Katzman said he has no plans to begin the search from scratch.

Instead, he spoke to representatives from Boeing and the creditors committee yesterday and hoped to pick a new trustee from the old pool of candidates. Some of the candidates had already been contacted yesterday.

Boeing Capital Corp. spokesman Russ Young also didn't believe that Monahan's resignation will have much effect on Hawaiian's reorganization.

"He was highly regarded, but the fact that he hadn't been there very long probably works to the advantage," Young said. "There isn't a lot of ground to make up for someone new."

Gov. Linda Lingle said at a luncheon yesterday that the state is looking into the bankruptcy "for a number of different reasons."

"Hawaiian's bankruptcy is a major issue for the state and we are involved, and we are creditors as well."

Advertiser Staff Writer Kelly Yamanouchi contributed to this report.