go! parent faces bond 'in vicinity' of $98M
By Rick Daysog
Advertiser Staff Writer
By Rick Daysog
The parent of go! airlines may have to post a $98 million bond while it appeals a ruling that it misused confidential information, according to a federal judge.
During a hearing yesterday, U.S. Bankruptcy Judge Robert Faris also indicated that the chances for Mesa Air Group's request for a new trial aren't very high.
"As a statistical matter, new trials are less likely to be" granted, Faris said.
Mesa Air Group is appealing Faris' decision last month to award $80 million plus interest and attorneys fees to Hawaiian Airlines for using Hawaiian's business plan and other proprietary information to launch go! last year.
The Phoenix-based carrier also is asking for a new trial on the grounds that Faris abused his discretion by not allowing Mesa to introduce evidence that would have helped its case.
Faris said he will hold a hearing Monday on the bond amount that Mesa must put up. But he said "the number is going to be in the vicinity" of what Hawaiian is seeking.
In its legal papers, Hawaiian asked for a bond of $98 million to cover the $80 million judgment, $4.75 million in legal fees and about $13 million in interest that would accrue during the appeal process.
Faris said he will hold a separate hearing on Mesa's request for a new trial on Dec. 13.
In its court papers, Mesa said it has secured a bond for $85 million through Federal Insurance Co., a major Mainland insurer that issues surety bonds.
Hawaiian is asking for the high bond amount because it believes that Mesa's cash holdings have declined "substantially" during the past year and that the company has been "siphoning off" cash to shareholders to support its stock price.
Sidney Levinson, attorney for Hawaiian, noted that Mesa's stock prices have fallen by about 50 percent in recent months while the company has spent about $60 million to buy back stock since Hawaiian filed its lawsuit in 2006.
Evan Jones, attorney for Mesa, said the company has enough assets to cover the judgment and post a bond.
Recent filings with the Securities and Exchange Commission show that Mesa has about $200 million in cash and marketable securities.
In a related matter, Faris approved Mesa's motion to allow attorneys Jones and Daniel Petrocelli to represent the airline.
Petrocelli, a partner in the Los Angeles firm of O'Melveny & Myers LLP, represented former Enron Chief Executive Officer Jeffrey Skilling, who was convicted on fraud and other charges last year.
He also represented the family of Ronald Goldman, who successfully sued O.J. Simpson in a civil suit after Simpson was acquitted of murder in criminal court.
Reach Rick Daysog at firstname.lastname@example.org.