POSTED: Sunday, May 31, 2009

It appears the Hawaii Superferry will not return to isle waters after all, since the company filed for Chapter 11 bankruptcy protection yesterday in Wilmington, Del.





        A partial list of Hawaii Superferry's creditors and their unsecured claims:

» State of Hawaii: $731,080, minimum annual guarantees, liens and revocable permits.


» MTU: $544,653, engine maintenance and maintenance technician.


» Monarch Insurance Services Inc.: $202,000, workers' comp insurance.


» Sodexo Inc. and affiliates: $182,198, contract services/product costs for food, beverage and gift shop.


» Laird Christianson Advertising: $134,725, marketing/media services.


» Entrix Inc.: $126,002, consulting fees.


Source: U.S. Bankruptcy Court filing.




In its petition, the company reported more than $100 million in assets and debts and said it would use the bankruptcy to close its business completely and liquidate the operation.

In a written statement, Hawaii Superferry officials said that with no ability to operate in Hawaii, the company has had no money to maintain the Alakai and a sister vessel, Huakai, which was scheduled to start sailing next year.

The company said efforts to charter the ships failed and the company couldn't come up with additional financing.

“;Accordingly, a filing of Chapter 11 was an unavoidable next step,”; the company statement said.

Michael Formby, director of harbors for the state Department of Transportation, said, “;Being informed (yesterday) that they did, in fact, file for bankruptcy is very disappointing.”;

Robert Harris, Hawaii chapter director of the Sierra Club, called the move unfortunate but avoidable.

“;If the company and state had followed the law in the beginning, this could have been avoided,”; Harris said. “;It's bad for businesses to cut corners and try to work the political process to get special favors.”;

The looming end of Hawaii Superferry brings closure to a saga that began in August 2007, when the Hawaii Supreme Court ruled—two days before the launch of the interisland service to Kauai and Maui—that an environmental review should have been completed before the state proceeded with $40 million in harbor improvements to accommodate the massive vessels.

The state maintained that the harbor improvements simply extended existing facilities—an action not requiring environmental review.

Court challenges and protesters in harbor waters off Kauai and Maui led the ferry to suspend operations, until the Legislature came back in special session in October 2007 to pass a law, known as Act 2, that allowed the $85 million, 349-foot twin-hulled catamaran Alakai to sail while an environmental impact statement was being prepared.

The ferry, capable of carrying as many as 866 people and 282 cars, sailed until this past March, when the Hawaii Supreme Court struck down Act 2 as unconstitutional because it benefited a specific company.

In addition to the court decision, Hawaii Superferry said its business was hurt by a decline in tourism, a 2008 increase in fuel prices and a interisland air fare price war.

Still at issue is whether the state or Superferry, will sue over the outcome of the service.

“;Nobody has had that discussion yet,”; Formby said. “;Up to this point, we've been trying to be as collaborative as we could be to encourage them to return and resume service.

“;We haven't actually sat down and had the tough discussion about legal liberties against one another.”;

Superferry officials in Hawaii did not return telephone messages yesterday seeking comment.

Bloomberg News Service contributed to this report.






        » February: State determines that the Hawaii Superferry operations are exempt from an environmental review, which must be done under state law prior to the start of activity.

        » Aug. 23: Hawaii Supreme Court rules that environmental laws require the state to review the impact of Superferry operations on the environment. Ruling overturns 2005 decision by Maui Circuit Judge Joseph Cardoza.
        » Aug. 24: Superferry officials announce they are moving up the scheduled launch by two days, with one-way fares at $5 per person and per vehicle.
        » Aug. 26: Inaugural voyage. Superferry's Alakai leaves Honolulu for Kahului Harbor and returns, but the afternoon cruise to Kauai is met by protesters who prevent it from docking at Nawiliwili Harbor.
        » Aug. 27: Judge Cardoza issues order banning Superferry operations to Maui until the state conducts an environmental review in response to complaints filed by the Sierra Club, Maui Tomorrow Foundation and the Kahului Harbor Coalition. Superferry decides to suspend service to Kauai as well.
        » Oct. 31: The Hawaii Legislature passes Act 2 in a special session, allowing the Superferry to operate while the state prepares an environmental impact statement.
        » Nov. 14: Cardoza lifts his ban on Superferry operations to Maui because of Act 2.
        » Dec. 13: Superferry resumes service between Honolulu and Maui, though it is disrupted by high waves and repairs.
        » Dec. 17: Auditor slams state on Superferry, saying it ignored its own long-standing policy and environmental laws.


        » Feb. 9: Plagued by weather- and equipment-related shutdowns, Hawaii Superferry places the Alakai in dry dock two months in advance of its mandatory maintenance. Repairs are extended until April.
        » Feb. 29: Sierra Club and two other groups file formal notice that they will appeal Cardoza's ruling and go directly to the Hawaii Supreme Court.
        » April 25: Retired Navy Adm. Thomas Fargo, former head of the U.S. Pacific Command, succeeds John Garibaldi as president and CEO of Hawaii Superferry.
        » Aug. 18: State and Superferry file legal briefs defending Act 2.
        » Aug. 19: Superferry celebrates its 125,000th passenger.
        » Oct. 28: Superferry postpones introduction of second ship and start of service to the Big Island for about one year.


        » March 16: Hawaii Supreme Court rules that the state law allowing Superferry to operate while an environmental impact statement was conducted is unconstitutional. The court sends the case back to Circuit Court.
        » March 28: Alakai leaves Honolulu for Mobile, Ala., where the company says it is being sent to be in position for future use.
        » May 15: Hawaii Superferry auctions its equipment at Kahului Harbor on Maui. An auction on Oahu is held a week later.
        » May 30: Hawaii Superferry files for Chapter 11 bankruptcy protection in U.S. Bankruptcy Court in Delaware.


Source: Star-Bulletin archives and Hawaii Superferry