Lawsuit seeks
to stop local
airlines’ merger

A shareholder group claims the
merger of Hawaiian and Aloha
is to benefit insiders

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By Lyn Danninger
ldanninger@starbulletin.com

A group of Hawaiian Airlines shareholders filed a class-action lawsuit yesterday to prevent the company's proposed merger with Aloha Airlines.

The complaint was filed in state Circuit Court by Honolulu attorneys Mark Davis and Michael Livingston on behalf of Crandon Capital Partners, described in the filing as a group of shareholders.

The suit alleges that the merger would result in a windfall for the controlling shareholder of Hawaiian -- Airline Investors Partnership LP, which owns 53 percent of the airline -- and Hawaiian's chairman, John W. Adams, to the detriment of other public shareholders.

The complaint has not yet been served, Livingston said.

Hawaiian Airlines had no comment.

"Until we have a chance to review it, we're not in a position to comment, spokesman Keoni Wagner said yesterday.

Livingston characterized such suits as common.

"In mergers and acquisitions and transactions of this size with such far-reaching consequences, litigation is common," he said.

Livingston said the suit is based upon the duties that directors have to their shareholders.

"Among other things, they cannot put their interests or the interests of other insiders ahead of ordinary shareholders," he said. "Based upon the public filings and the documents to which we have access, that appears to be what has happened."

Livingston said he would not be surprised to see other lawsuits filed to prevent the merger.

"It's a transaction that is affecting the lives, livelihoods and investments of thousands of people," he said.

Since the merger was announced last month, Hawaiian's stock has climbed from $2.50 to close yesterday at $3.98.

Crandon Capital Partners has filed several similar lawsuits in the past, in Hawaii and across the country.

When David Murdock, chairman of Castle & Cooke, acquired the remaining stock necessary to return the company to private hands, Crandon was among the shareholders who unsuccessfully sued to prevent the takeover.