Hawaiian shareholders seek representation

By Debbie Sokei
Advertiser Staff Writer

A group of minority shareholders of Hawaiian Holdings Inc., the parent company of Hawaiian Airlines, wants better representation in the carrier's bankruptcy case so that its members don't end up losing their investment.

Lonestar Partners LP, Triage Capital Management LP, Kaua'i resident Norm Caris and Hawaiian Airlines employees who own shares filed a motion Tuesday with bankruptcy court to form a committee to represent their interest in the year-old bankruptcy case.

The group owns between 20 percent and 25 percent of Hawaiian Holdings stock, Caris said.

When a company emerges from Chapter 11, suppliers and other creditors are first in line to get paid. If there aren't enough assets to cover those obligations, shareholders get nothing. Existing shares typically get canceled on the effective day of the reorganization, and new shares are issued.

In their filing, the minority shareholders claim they should get something for their stock because the airline has few debts and is earning a profit.

The stock closed yesterday at $3.26.

Hawaiian filed for bankruptcy in March 2003 after John Adams, the CEO at the time, was unable to reach an agreement with Boeing to reduce leases on Hawaiian's fleet.

Three reorganization plans have been filed to take over Hawaiian Airlines. Plans filed by Adams and Robert Konop, a pilot for Hawaiian, would give shareholders and employees stocks in the new company. A third plan by Corporate Recovery Group LLC., a Wyoming-based turnaround company, would cancel existing shares.

"These shares are worth significantly more than they are being sold in the market. In addition to that, there is significant cash flow to get the company out of bankruptcy," Caris said.

Reach Debbie Sokei at 525-8064 or dsokei@honoluluadvertiser.com.