Posted on: Saturday, August 28, 2004

Hawaiian takeover backed

By Dan Nakaso
Advertiser Staff Writer

Hawaiian Airlines' Official Committee of Unsecured Creditors will join Hawaiian's bankruptcy trustee in supporting a reorganization plan by Ranch Capital LLC that will pay off all of the airline's debts.

The creditors committee's support, along with trustee Josh Gotbaum's, further strengthens Ranch Capital's effort to take over Hawai'i's largest airline.

Shares of Hawaiian Holdings, the airline's parent company, rose 64 cents yesterday to close at $7.20. About 671,000 shares traded hands, up from the six-month average volume of 139,000 shares.

Ranch has said it will not cancel the shares if selected by U.S. bankruptcy court from among several groups interested in taking over the bankrupt Hawaiian. The bankruptcy judge will rule in the coming months on which group gets control of the company.

Many details of Ranch's plan won't be known until Monday, the deadline for competing bidders to submit their proposals to the court.

Lawrence S. Hershfield of Ranch Capital took a major stake in Hawaiian Holdings in June when he paid $41.4 million for 10 million of the company's 28.4 million shares and replaced former Hawaiian CEO John Adams on the board of directors.

Under the plan, Hershfield would become chairman of Hawaiian Airlines; former American Airlines CEO Donald Carty would serve on the board. Mark Dunkerley, Hawaiian's president and chief operating officer, would become chief executive officer, replacing Gotbaum.

Gotbaum said the plan would offer Hawaiian's creditors full payment of their approved claims, in their choice of a half-cash, half-stock deal or a long-term note.

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