It was a stunning rebuke of the high-flying corporate titan.

U.S. Bankruptcy Judge Robert Faris had just ordered Mesa Air Group to pay Hawaiian Airlines $80 million for misusing confidential business information.

Now he was questioning the credibility of the Phoenix-based company's CEO, Jonathan Ornstein.

"I must say I did not not believe his testimony at that point," Faris said during a Dec. 13 hearing.

"I — I — I simply didn't believe that testimony."

The remarks raised eyebrows among courtroom observers, who had become accustomed to the judge's low-keyed and measured demeanor. But those who have known Faris well said they weren't surprised by the stinging criticism.

Since his appointment to the bench in 2002, the 49-year-old Faris has built a reputation in local bankruptcy circles as an even-handed jurist, who is willing to take on difficult issues.

In the Hawaiian and Aloha bankruptcies, he played hardball with management and organized labor to get them to settle disputes over pay, work rules and pension benefits.

He also took the unusual step of ousting Hawaiian's CEO John Adams after creditors accused Adams and his investor group of self-dealing. Faris later chopped down court-appointed trustee Joshua Gotbaum's bonus request from $8 million to $250,000.

"His reputation out there is that he is a very fair judge," said local real estate broker Steve Sofos, who was a creditor in a two-year-old bankruptcy dispute involving a local family-owned real estate company.

Mesa's Ornstein disagrees. Ornstein, whose company is appealing Faris' ruling, has said in recent news releases that Faris' "judgment was wrong."

"The order is not a result of a jury finding, but from a bankruptcy judge who entered sanctions against Mesa concerning evidentiary issues," Ornstein said in an Oct. 31 news release. "We believe these sanctions went too far and that an impartial appellate court will find the sanctions and this judgment should be set aside."

Faris declined comment on Hawaiian and Aloha bankruptcies and the subsequent lawsuits against Mesa since the cases are pending. But he did speak about his general approach to bankruptcy cases.

The former bankruptcy law attorney said he usually prefers that parties in disputes settle their differences on their own before he has to make a decision.

During courtroom hearings, he often warns creditors and debtors that if neither side can come to an agreement, both sides may wind up disliking his ruling.

"There's a saying the worst settlement is still better than the best lawsuit," said Faris.

"I'm always glad to see people when they can come to an agreement to solve their problems."

He also is a strong believer in fair play.

Faris cited a recent Chapter 7 bankruptcy, in which a debtor told the court that her only means of transportation was an inexpensive Geo Metro. But debtor's court-appointed trustee later found out that she also drove an expensive Jaguar sports car.

The Jaguar was later turned over to the trustee before the woman could close her case.

"When people ... want the protection of the bankruptcy court, they have to play fair," Faris said.

"You have to play fair with the system."

Breaking the rules can have harsh consequences in Faris' courtroom.

In a 2006 ruling that foreshadowed his staggering $80 million judgment against Mesa, the judge found that a disbarred lawyer and accountant, who had filed for Chapter 7 bankruptcy, failed to turn over "appropriate tax records, bank statements, credit card records" and refused to produce appropriate records from his laptop computer.

Faris ruled that the ex-lawyer, former Massachusetts resident Bernard Milgrom, was in contempt of court and rejected Milgrom's request to close his bankruptcy case. He also allowed creditors to examine Milgrom's finances to see if he was hiding assets from them.

Faris initially issued a bench warrant for Milgrom' arrest during a court hearing but later rescinded the bench warrant in his written ruling.

"He's not afraid of making decisions, including tough decisions," said local bankruptcy attorney Don Gelber, Faris' former partner and mentor.

HANDLED MAJOR CASES

Faris' approach on the bench was honed by nearly two decades in private practice where he specialized in complex bankruptcy and business law cases.

The native of Washington state was a longtime partner in the law firm now known as Gelber, Gelber & Ingersoll, which he joined in 1983 after graduating from University of California-Berkeley's Boalt Law School.

During his tenure with the firm, Faris worked with his mentor Gelber on a number of spectacular fraud cases, such as the $50 million collapse of Agretech and the Ron Rewald Ponzi scheme.

In the late 1970s, Rewald headed the Bishop, Baldwin, Rewald, Dillingham & Wong investment firm, which swindled $22 million from hundreds of local investors. Rewald, who had bragged of his ties with the Central Intelligence Agency and allowed the CIA to use his office as a mail drop for overseas agents, was eventually convicted of fraud and tax evasion and received an 80-year prison sentence.

Faris' firm represented the court-appointed bankruptcy trustees, who were able to collect $2 million for investors.

Agretech was a former nursery operator headed by former state Rep. Richard Garcia that defrauded thousands of local and Mainland investors during the early 1980s. Garcia was sentenced to eight years in jail after pleading guilty to security fraud.

Few cases have been more complicated than the bankruptcies of Hawai'i's airlines.

The Aloha bankruptcy was further complicated by the airline's dire financial straits.

The state's No. 2 airline filed for Chapter 11 protection in December 2004 with as little as $2 million in unrestricted cash.

Before it emerged from bankruptcy in February 2006 under new ownership led by California billionaire Ron Burkle, the company faced potential shutdown several times.

Aloha also sparred with its unions over the termination of workers' defined-benefit pensions, which would have reduced pilots' monthly pension benefits by as much as 70 percent.

Mike Feeney, longtime pilot for Aloha Airlines, believes that Faris played a critical role in getting management and the unions to continue talking. The concession were onerous for union workers but Feeney said he doesn't blame the judge for that outcome.

"I don't think what happened to the pilots was fair but I don't think it was his actions that were the cause of that unfairness," Feeney said.

"He had to weigh the interests of 3,500 jobs and the economy of the state against the interests of 300 pilots."

Reach Rick Daysog at rdaysog@honoluluadvertiser.com.