honoluluadvertiser.com

Sponsored by:

Comment, blog & share photos

Log in | Become a member
The Honolulu Advertiser
Posted on: Wednesday, May 14, 2003

Hawaiian exchanges plans with jet creditor

By Kelly Yamanouchi
Advertiser Staff Writer

Hawaiian Airlines and Boeing Capital Corp. exchanged proposals yesterday in an effort to settle their differences before a bankruptcy judge rules on the aircraft lessor's request to replace Hawaiian's management with a trustee.

In another development, the state Department of Transportation said Hawaiian owes the state about $621,630 for March.

The amount includes Hawaiian's landing fees and other utility costs, said Hawaiian spokesman Keoni Wagner. He said Hawaiian is not permitted to pay that amount because bankruptcy rules restrict payment of the debt.

It was not immediately clear how soon the cash-strapped state could collect the money.

Hawaiian, aircraft lessor Boeing Capital and a creditors committee were engaged in conference calls late into the day yesterday. None of the parties would disclose details of either the talks or proposals, but Boeing Capital spokesman Russ Young said the company is asking for "sufficient controls to prevent future insider transactions" and the right for outside investors to submit reorganization plans for Hawaiian.

Young said "it seems like it would be hard to meet those requirements without" chief executive and chairman John Adams stepping down. "If there's a creative and meaningful alternative we're certainly willing to look at it, but ... it would take something incredibly creative to provide the assurance that we need."

Boeing Capital has been seeking the ouster of the airline's management while Hawaiian attempts to restructure its aircraft lease agreements under Chapter 11 bankruptcy protection. In calling for the ouster of Adams, Boeing cited Hawaiian's $25 million stock buyback last June and a $500,000 payment to its parent Hawaiian Holdings shortly before it filed for bankruptcy protection on March 21.

Bankruptcy Court Judge Robert Faris said last Friday he was concerned about the two transactions and indicated he favored appointing either a trustee or an examiner for the carrier. Faris said he planned to decide promptly, but also urged the parties to work toward a settlement.

Wagner said "John Adams is intent on finding an acceptable solution that would avoid the appointment of a trustee."

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