Posted on: Friday, April 2, 2004
Plans for taking over Hawaiian Air due June 14
By Debbie Sokei
Advertiser Staff Writer
A federal bankruptcy judge yesterday set a June 14 deadline for parties interested in taking over Hawaiian Airlines to file their reorganization proposals and said the winning bid will be confirmed on Aug. 31.
The decision means Hawaiian Airlines, which filed for Chapter 11 bankruptcy a year ago, could be back to normal operations by mid-September.
Judge Robert Faris said the best way to get the maximum value for bankrupt Hawaiian Airlines is through a competitive bid process that will level the playing field for all potential investors.
"There are benefits to getting this case over," Faris said. "It is also very important to get this done right by getting the best and highest offer."
Three groups have already submitted proposals to reorganize the airline and will compete with a plan put forward by Josh Gotbaum, the court-appointed trustee.
The approved plan encourages competitive bids and allows interested parties to retain their anonymity, Gotbaum said.
"There are some people who are interested in investing in Hawaiian Airlines who don't want the world to know they are thinking about it until they got a real chance in actually succeeding," Gotbaum said.
Groups proposing to take over Hawaiian do not have to disclose their intentions until the June 14 deadline. Groups that are deemed credible by Gotbaum and a Hawaiian Airlines creditors committee will get access to the airline's operations, management and finance information.
Corporate Recovery Group, a Wyoming-based turnaround company, and Hawaiian Holdings Inc., the parent company of Hawaiian Airlines, will be given information on the airline's finances. A third bidder, Robert Konop, a Hawaiian Airlines pilot, will eventually be given the same information once he secures financial backing, said Bruce Bennett, an attorney for Hawaiian Airlines.
"I think it's a victory for everybody because not a single party gets an unfair advantage," said Guy Neal, attorney for Hawaiian Holdings. "Everyone is on equal footing now in terms of getting access to information."
Hawaiian Airlines filed for Chapter 11 in March 2003 after John Adams, the former CEO of Hawaiian Airlines, could not reach a lease agreement with Boeing to reduce the leases on Hawaiian's fleet. Adams was stripped of his duties by the bankruptcy court at Boeing's request and Gotbaum was appointed to take the airline out of bankruptcy.
Also yesterday, Corporate Recovery Group and Boeing Capital, which filed a plan in February to invest $30 million to take Hawaiian out of bankruptcy, released the terms of the agreement they signed before filing their joint reorganization proposal.
"By disclosing our agreement with Boeing, one of Hawaiian's largest creditors, we believe we are leveling the playing field for everyone who might be interested in reorganizing Hawaiian Airlines," said Allan Tessler, a principal in CRG.
Boeing also said it may withdraw its support for CRG's plan if a more favorable plan is proposed.
Reach Debbie Sokei at 525-8064 or dsokei@honoluluadvertiser.com.
