Hawaiian Telcom ousts CEO
Firm names restructuring guru as replacement
STORY SUMMARY »
Hawaiian Telcom has abruptly replaced its chief executive officer, Michael Ruley, with a high-profile restructuring specialist to turn around operations and improve customer service.
The troubled telecommunications firm -- which is in the process of a cost-cutting program that has reduced staffing by more than 100 positions -- yesterday named Stephen Cooper, chairman of Kroll Zolfo Cooper, a New York restructuring advisory and interim management company, its chief executive.
Ruley's abrupt departure was a mutual decision involving Hawaiian Telcom's investors, said Cooper, who replaced Kenneth Lay in 2002 as interim head of Enron Corp. and has led complex restructuring projects including the recent bankruptcy of American Home Mortgage.
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Hawaiian Telcom has abruptly replaced its chief executive officer, Michael Ruley, with a high-profile turnaround expert to restructure operations and improve customer service.
The company named yesterday Stephen Cooper, chairman of Kroll Zolfo Cooper, a New York restructuring advisory and interim management company, to be chief executive officer of the troubled isle telephone and Internet services company.
Hawaiian Telcom, which lost $29.5 million last quarter, is in the midst of a cost-cutting program that has seen it shed more than 100 positions since the beginning of last year -- most recently more than 50 managers laid off last month.
Cooper, who replaced Kenneth Lay in 2002 as interim head of Enron Corp. as its financial scandal unraveled, has led a number of complex restructuring projects, including the bankruptcy of American Home Mortgage last year.
He has more than 35 years of experience providing leadership for underperforming and troubled firms, representing both creditors and companies in distressed cases.
Ruley's abrupt departure was a mutual decision involving Hawaiian Telcom's investors, Cooper said. Ruley was named Hawaiian Telcom CEO in October 2004.
"It wasn't precipitous, but this had been something both parties had on the radar screen for the last couple of weeks," Cooper said. "The investors had a view that Mike had taken the company a long way and that they needed just some additional support to continue to drive that progress at an accelerated rate."
Ruley could not be reached for comment yesterday.
Cooper said he doesn't have specific plans for further layoffs and will work with management to redirect company operations.
"It's really going to take me some amount of time to get a clear handle on it," he said.
Cooper called himself a "permanent interim" executive who is committed to working with the company until operational issues are resolved. He declined to disclose the price the company is paying for his services.
Hawaiian Telcom has been losing land-line customers as more people drop their service in lieu of cell phones. Meanwhile, revenue from its DSL high-speed Internet service hasn't been enough to offset losses.
The company is embarking on an operational turnaround -- not a financial restructuring -- and is not contemplating filing for bankruptcy, company officials said.
"In my view, Hawaiian Telcom is financially stable and has ample liquidity available," Cooper said.
"This leadership change demonstrates Carlyle's commitment and focus on improving the business," said a spokeswoman from the Carlyle Group, the global private equity firm that bought Hawaiian Telcom in 2005.
STEPHEN F. COOPER
August 2007-present: American Home Mortgage Investment Corp., chief restructuring officer
February 2007-present: Collins & Aikman Corp., chairman/ interim CEO; chair since 2005
2002-present: Kroll Zolfo Cooper, chairman
March 2006-June 2006: Krispy Kreme Doughnuts Inc., chief restructuring officer; CEO from January 2005-March 2006
1985-September 2002: Kroll Zolfo Cooper
1995-1996: Morrison Knudsen Corp., adviser
1990-1992: Federated Department Stores, adviser
Jan. 2002-unknown: Enron Corp., interim CEO/chief restructuring officer
July 2000-unknown: Laidlaw Inc., vice chairman, chief restructuring officer
Source: Bloomberg News