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The Honolulu Advertiser
Posted on: Friday, October 28, 2005

Ruling on bonus for Gotbaum not final

By Rick Daysog
Advertiser Staff Writer

GOTBAUM'S COMPENSATION

Tenure as trustee: July 2003 to June 2005

Salary: $1.2 million

Expenses: $276,000

Judge's recommended bonus: $250,000

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A federal judge said yesterday former Hawaiian Airlines trustee Joshua Gotbaum's request for an $8 million bonus was excessive, but the judge stopped short of finalizing an order that would cut Gotbaum's fee to $250,000.

"My view is that $8 million is too much," said U.S. Bankruptcy Judge Robert Faris. "The question is what is the right amount."

After a two-hour hearing yesterday, Faris placed Gotbaum's controversial fee request under advisement. Faris did not say when he might make his decision.

Faris issued a nine-page, interim ruling on Wednesday, reducing Gotbaum's $8 million fee to $250,000.

Gotbaum, who appeared at yesterday's hearing, said he wanted to reserve his remarks until after Faris makes a final ruling.

Gotbaum's attorneys previously argued that an $8 million bonus was reasonable given the airline's emergence from bankruptcy in June as a profitable company.

Gotbaum, who served as Hawaiian's trustee between 2003 and 2005, was paid $50,000 a month and given $10,000 a month for expenses. His total compensation was about $1.4 million.

Gotbaum's request for a bonus has been criticized by the airline's current management, unions and creditors, who argue that the former trustee was well-compensated and should not receive a bonus.

Jeff Krause, attorney for the airline's parent Hawaiian Holdings Inc., said Gotbaum took credit for achievements that were the work of others in the company.

According to Krause, the airline's successful negotiations for new aircraft leases were well under way before Gotbaum was appointed trustee in July 2003.

"This airline is valuable because of the employees at the airline," Krause said.

Reach Rick Daysog at rdaysog@honoluluadvertiser.com.