Hawaiian Holdings investors denied
By Debbie Sokei
Advertiser Staff Writer
Shareholders of Hawaiian Holdings Inc., the parent company of Hawaiian Airlines, were dealt a setback yesterday in their efforts to prevent the shares from losing all value when the airline emerges from bankruptcy.
Federal Bankruptcy Judge Robert Faris denied a group of minority shareholders special standing in the Chapter 11 bankruptcy case. Faris said because they own shares in Hawaiian Holdings and not in the debtor, Hawaiian Airlines, they cannot be granted special status.
The shareholders had asked the bankruptcy court to allow them to form a committee to represent their interests in the case.
"The lawyers thought it was a long shot to begin with and they came a little closer than they anticipated," said resident Norm Caris, who owns 700,000 shares in Hawaiian Holdings.
One group bidding to take Hawaiian out of bankruptcy, the Wyoming-based Corporate Recovery Group LLC, has said it would cancel the existing shares, which is common practice in bankruptcy cases.
The shareholders argue that Hawaiian entered into bankruptcy to renegotiate aircraft leases and the company has value beyond its debts and that value should be shared with stockholders.
The shareholder group includes Lonestar Partners LP, Triage Capital Management LP, Hawaiian Airlines employees and Caris. Together they own 20 percent to 25 percent of Hawaiian Holdings stocks.
The stock closed yesterday at $4.17, down 21 cents.
John Adams, chairman of Hawaiian Holdings, who filed one of three reorganization plans proposing to take Hawaiian out of bankruptcy, applauded Faris' ruling. Adams said the company will continue to represent its shareholders.
"Hawaiian Holdings fully understands the concerns of the thousands of people that have invested in Hawaiian Airlines, and stands by our long-held pledge to fairly and aggressively represent the interests of all shareholders," Adams said.
Under Hawaiian Holdings' plan, current shareholders will get 40 percent ownership in the new company.
A winning bid to take the airline out of bankruptcy will be selected Aug. 31.
Hawaiian Airlines filed for bankruptcy March 2003 after Adams, the CEO at the time, was unable to reach a new lease agreement with Boeing.
Reach Debbie Sokei at 525-8064 or dsokei@honoluluadvertiser.com.
