Judge affirms $250,000 fee for Hawaiian trustee
A federal bankruptcy judge, putting an end to a battle between Hawaiian Airlines and its former trustee, yesterday upheld his tentative ruling to reduce Joshua Gotbaum's success fee to $250,000.
Faris, who said during a hearing last Thursday that he wasn't about to grant Gotbaum the $8 million he was requesting, issued a final written ruling yesterday that left Gotbaum's final two-year compensation, which includes expenses and the success fee, at just under $1.7 million.
Faris was apparently unswayed by arguments from Gotbaum's attorneys and U.S. Trustee Steve Katzman to increase the award, though Faris last week had appeared to leave open the possibility that the tentative $250,000 award could be increased when Faris took his own tentative ruling under advisement.
In his final ruling, Faris repeated several of the same points he made in his tentative decision, including singling out the sacrifices made by the employees as well as praising Gotbaum for the success of the 26-month bankruptcy proceeding that resulted in full payment to unsecured creditors and the preservation -- albeit diluted -- of parent company Hawaiian Holdings' stock.
"This trustee was willing to undertake his daunting task with an agreed-upon monthly interim compensation payment (of $50,000 a month and $10,000 a month in living expenses) but without any assurance whatsoever concerning the amount of final compensation," Faris wrote in his 12-page decision. "It is speculative at best to say that this allowance will discourage qualified individuals from accepting future trusteeships."
Gotbaum released a statement from Washington, D.C., last night in which he said he was "profoundly disappointed."
"The judge concluded I did an 'admirable' job and that the results were 'remarkable,' yet awarded me compensation well below that of other trustees, and even of some of the people I supervised during the bankruptcy," Gotbaum said.
Mark Dunkerley, Hawaiian's president and chief executive, avoided commenting on the amount of the award.
"We're glad this issue has now been put to rest so we can focus on the future," he said.
Katzman, who had lobbied by videoconference in Thursday's hearing to increase Gotbaum's compensation, said at the time that Gotbaum's hourly rate came to $281 an hour. That was less than the $400 an hour paid to Gotbaum's predecessor, John Monahan, who resigned for personal reasons after just three weeks on the job.
Attorney Brett Miller, who represented a committee of Hawaiian Air's unsecured creditors, applauded the ruling.
"(Faris') decision stresses the sacrifices made by the numerous parties involved," said Miller, who is with the law firm Otterbourg, Steindler, Houston & Rosen in New York.