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Friday, May 7, 2004



Vx Capital will file
a plan for Hawaiian


Vx Capital Partners, confirming its commitment to file a reorganization plan in the Hawaiian Airlines bankruptcy, has submitted an expression of interest with airline trustee Joshua Gotbaum and the unsecured creditors' committee.

Hawaiian Air Stephen Compagni Portis, a partner with the San Francisco-based airline investment company, said yesterday that his company hopes to file a plan in conjunction with the trustee and the committee. However, Portis said Vx is prepared to file a plan independently if it isn't selected as a reorganization plan partner.

Portis said he was unaware of the identities of other parties who expressed interest by a Wednesday deadline that was set by the trustee and committee.

Under Portis's plan, Vx will invest a minimum of $30 million, pay creditors a combination of cash, new equity and secured notes, and retain the existing management team, which includes Chief Executive Officer Mark Dunkerley. Portis also said he has landed several high-profile investors, including Marty Anderson, a partner with Honolulu law firm Goodsill Anderson Quinn & Stifel. Portis said Anderson is investing "a seven-figure number." Goodsill Anderson Quinn & Stifel also is Vx's legal counsel in Hawaii.

Other components of Vx's plan are no employee concessions, the acceptance of the Boeing Capital Corp.-Corporate Recovery Group LLC lease terms which Vx has not seen; and a restructured pilots' pension plan that Gotbaum and the pilots are negotiating.

Portis also said he didn't believe existing equity would be "in the money" because he believed the total of the legitimate unsecured claims are about $300 million and exceed the value of the company.

He said the trustee and committee have set a June 2 deadline for parties to submit a noncontingent firm offer of exactly what they are prepared to do and, based on those letters, the trustee and committee will determine with whom they want to team up.

So far, there have been four reorganization plans filed in the 13-month old bankruptcy case. Aircraft lessor Boeing Capital and turnaround firm Corporate Recovery Group filed the first one. They were followed by parent company Hawaiian Holdings Inc.; Hawaiian Airlines pilot Robert Konop; and a joint plan filed by the Hawaiian Reorganization Committee, comprising some airline employees and small creditors, and the Hawaiian Investment Partners Group LLC, which is made up of investors and venture capitalists.

Jefferies & Co., a New York-based investment banker, and Connecticut-based Pegasus Capital expressed interest in federal Bankruptcy Court last month but have not commented publicly.

Portis said he believes Vx is the leading candidate to team up with Gotbaum and the committee.

"I think we are, but I don't know who else has submitted letters and who they're talking to," Portis said.

"I'm aware of no other parties that have invested a fraction of the time and resources that we have to understand all of the various aspects of this bankruptcy case."



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