John Monahan selected to run Hawaiian Airlines

By Dan Nakaso
Advertiser Staff Writer

The hard work begins on Monday for John Monahan, who will guide Hawaiian Airlines through bankruptcy as its trustee with a philosophy that he can help turn around "a Hawai'i icon."

MONAHAN

But Monahan knows through his experience as the head of Liberty House during its three-year bankruptcy that he needs to calm employee anxiety when he meets with Hawaiian officials for the first time on Monday.

"It's very important that you communicate consistently about the process and honestly tell them where things are," Monahan said. "Any time there's change, there's natural apprehension. One of my jobs is to get to know the management and the people at Hawaiian as soon as I possibly can and develop a rapport with them and move the company on to successful reorganization."

Monahan's salary as trustee will have to be worked out with the bankruptcy court. Monahan also said it's too soon to predict how long it will take Hawaiian to emerge from bankruptcy.

Yesterday, the Office of U.S. Trustee selected Monahan over some two dozen candidates interested in running Hawaiian during its Chapter 11 bankruptcy reorganization. The company filed bankruptcy on March 21.

Monahan, 52, has no airline experience. But he is nevertheless "an excellent choice," said Anil Patel, an official with airline lessor Boeing Capital Corp. that included Monahan's name on a list of candidates. His name also was on the three-person list submitted to the trustee's office by the Official Committee of Unsecured Creditors.

Both groups urged federal bankruptcy Judge Robert Faris to appoint a trustee after alleging that Hawaiian's chairman and CEO John Adams had mismanaged the company.

Monahan "has great leadership skills, a proven track record with Liberty House, extensive knowledge of the Hawaiian community and people skills," Patel said. "You have to also remember that there are still a lot of capable people throughout Hawaiian's organization while Mr. Monahan is a proven person who can manage a business."

Monahan lives in East Honolulu and has been running a one-person consulting business. He left Liberty House when it was sold in 2001 to Federated Department Stores Inc., which converted the stores into Macy's.

During Liberty House's bankruptcy, which ended March 1, 2001, Monahan impressed Lesa Douglas with his commitment to the business and the employees.

"He's a very rare person," said Douglas, a paralegal at the law firm of Case Bigelow & Lombardi that served as local counsel for Liberty House. "I don't believe that I've ever seen a person in his position be so sympathetic to employees and care about a company the way he did. If he conducts himself as he did at Liberty House, the employees will come first."

The selection of a trustee to oversee Hawaiian took up much of the first two weeks of Steven Jay Katzman's early tenure as U.S. Trustee for the region covering the Southern District of California, Hawai'i, Guam and Saipan.

The staff in Hawai'i and Katzman's office in San Diego worked through the Memorial Day weekend interviewing candidates in what has proven to be "the most significant task I've undertaken" so far as trustee, Katzman said.

Katzman declined to say what distinguished Monahan from the other candidates.

But now that Monahan has the job, Katzman said, "it's his obligation to get in there and make the decisions with respect to both operation and reorganization."

Reach Dan Nakaso at dnakaso@honoluluadvertiser.com or 525-8085.