Mesa posts $90 million bond
It faced a deadline to prevent an asset seizure by Hawaiian Airlines
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Mesa Air Group posted a $90 million bond by yesterday's deadline to satisfy a court-ordered damages award against it in a federal lawsuit filed by Hawaiian Airlines for misusing confidential information.
The Phoenix-based parent of interisland carrier go! was ordered by Bankruptcy Judge Robert Faris to put up the bond after losing its bid to postpone the payment until a determination could be made on Mesa's motion for a new trial. That hearing will be held on Dec. 13.
The bond was guaranteed by Federal Insurance Co., a subsidiary of Chubb Corp.
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Mesa Air Group, parent company of interisland carrier go!, met its court-ordered deadline yesterday to post a $90 million bond to satisfy a damages award against it in a federal lawsuit filed by Hawaiian Airlines.
The Phoenix-based airline, which is appealing the damages award to federal District Court and seeking a new trial in Bankruptcy Court, was ordered to post the bond after losing its bid to postpone the payment until a determination could be made on Mesa's motion for a new trial.
The bond, which was needed to prevent Hawaiian from seizing Mesa's assets, was guaranteed by Federal Insurance Co., a Chubb Corp. subsidiary qualified to issue sureties.
On Oct. 30, Faris ordered Mesa to pay Hawaiian $80 million in damages, plus interest and attorney fees, after finding that Mesa had used confidential information obtained as a potential investor during Hawaiian's bankruptcy to gain a competitive advantage in entering the Hawaii market. Faris also ruled that since-fired Mesa Chief Financial Officer Peter Murnane had deliberately destroyed potentially relevant evidence that Mesa had a duty to preserve.
In a Monday hearing, federal Bankruptcy Judge Robert Faris ruled that Mesa should put up a $90 million bond by taking into account the $80 million in principal of the damages award, $4.7 million in legal fees and costs that Hawaiian is seeking, $3.4 million in interest for a year and $1.9 million to cover additional fees or interest if the appeal takes longer than a year.
Hawaiian had sought a $98 million bond to cover the estimated three years required for an appeal to the Bankruptcy Appellate Panel for the Ninth Circuit. Mesa had offered to put up $85 million.
Faris based the bond amount on the approximately one-year period it would take for the case to be heard in District Court, with any subsequent adjustments to the bond amount to be decided after the District Court makes its ruling.
Mesa's motion for a new trial will be heard by Faris on Dec. 13. Mesa said it wants a new trial because of new evidence it claims to have uncovered and alleged errors in Faris' ruling.