Mesa secures $85 million in bond funding
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Mesa Air Group said it has lined up a bond of $85 million in case a federal Bankruptcy Court judge denies its motion today to delay making a court-ordered damages payment to Hawaiian Airlines.
The operator of interisland carrier go! is seeking a new trial in the lawsuit filed by Hawaiian over go!'s startup. But it will have to come up with the money at the end of today's hearing unless Bankruptcy Judge Robert Faris grants Mesa a postponement.
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Mesa Air Group says it is prepared to put up a bond of $85 million if necessary in a hearing today in the federal lawsuit filed by Hawaiian Airlines.
The Phoenix-based parent of interisland carrier go! would have been required to put up an $80 million bond by last Friday. But late last week, Mesa asked Bankruptcy Judge Robert Faris for a new trial because of newly discovered evidence and errors in Faris' findings, prompting Faris to postpone payment until at least the end of today's hearing.
On Oct. 30, Faris ruled that Mesa Chief Financial Officer Peter Murnane destroyed evidence sought by Hawaiian, and that Mesa used confidential information obtained as a potential investor during Hawaiian's bankruptcy to gain a competitive advantage when entering the Hawaii market.
Mesa said yesterday it is prepared to post $5 million more than the judgment amount in a bond issued by Federal Insurance Co., an entity that is qualified to issue sureties.
Hawaiian, though, said it is entitled to $86.25 million, covering the period when a motion for a new trial is being considered: the $80 million judgment, $5.25 million in attorney fees and costs, plus another $1 million for interest since the Oct. 30 ruling.
Mesa said the bond request of $86.25 million is excessive because, among other things, Hawaiian is asking Mesa to secure fees that were not awarded or part of the judgment.
A hearing on Mesa's motion for a new trial is scheduled for Dec. 10.
Mesa said if its motion for a new trial is denied that it will appeal to the Bankruptcy Appellate Panel for the Ninth Circuit.