Judge urges further negotiations

By Kelly Yamanouchi
Advertiser Staff Writer

Hawaiian Airlines, the state's largest carrier, and Boeing Capital Corp, the leasing arm of the aircraft manufacturer, are working to resume negotiations at the urging of a federal bankruptcy judge. Richard Ambo • The Honolulu Advertiser

Judge Robert Faris is set to decide on Boeing Capital's request to oust Hawaiian chief executive John Adams and his management team. Faris said Friday that he would likely appoint a trustee to manage Hawaiian or an examiner to investigate its operations, and that denying the motion was the least likely option.

At the same time, Faris urged the parties to continue negotiations, adding they have more options than he has at his disposal.

Hawaiian spokesman Keoni Wagner said yesterday there had been no meetings since Friday with either Boeing Capital or the creditors committee, which has sided with the aircraft in favor of a trustee.

But Adams "has been reaching out to the parties to try to start those discussions as soon as possible," Wagner said.

Faris said Friday he was concerned about a $25 million stock buyback and a $500,000 payment the airline made to its parent Hawaiian Holdings within a week of the airlines' Chapter 11 reorganization filing on March 21. Boeing Capital called both of the transfers "fraudulent" and included them as part of its argument for the ouster of Adams, the company's majority shareholder.

Hawaiian attorneys have said the stock buyback and the $500,000 transfer were legitimate corporate expenditures.

Hawaiian and Boeing Capital also have yet to reach an agreement on Hawaiian's request to lower the cost of its aircraft leases. Hawaiian said it filed for bankruptcy protection to restructure its aircraft leases and keep operating.

Boeing Capital spokesman Russ Young said company officials have "been willing to talk to Hawaiian all along" on their disagreements.

"We have been in contact with both the airline and the creditors committee," but no agreements have been reached. "We asked for a trustee with the intention that getting one would be the best outcome, but we're certainly willing to listen to alternatives," Young said.

An attorney for the creditors committee could not be reached yesterday.

Reach Kelly Yamanouchi at kyamanouchi@honoluluadvertiser.com or at 535-2470.