Hawaiian Air wrong about
concessions, union saysHawaiian misrepresented the union's
take on firm management, it says
Hawaiian Airlines' pilots union said in a U.S. Bankruptcy Court filing yesterday that the carrier misrepresented the union's position on its willingness to agree to $8 million in concessions.
The Air Line Pilots Association said it is "wishful thinking" on the part of Hawaiian to contend that the union's concession agreement represented "a blanket approval of management."
Rather, the filing said, ALPA's willingness to support the agreement demonstrates the group's commitment to the reorganization of the airline. The filing said ALPA's Hawaiian master executive council earlier this year supported a no-confidence vote on Hawaiian Chief Financial Officer Christine Deister, the airline's audit committee and the board members, including Chairman and Chief Executive Officer John Adams, who voted in favor of last year's tender offer.
Hawaiian filed for Chapter 11 reorganization bankruptcy March 21 after negotiating $15 million in concessions with its three major unions but failing to renegotiate leases with its three aircraft lessors. Ten days later, Boeing Capital filed a motion requesting a trustee be appointed to lead the carrier through reorganization. Hawaiian management has opposed the motion.
Hawaiian spokesman Keoni Wager said yesterday the filing "reflects the dramatic tone of Boeing's assertion."
"However, we continue to work very closely with all of our union groups to complete the restructuring, and we're making progress," he said.
ALPA, one of seven members on the unsecured creditors committee, also said it wanted to reserve its right to state a position on Boeing Capital's trustee motion pending a May 8 hearing and the outcome of the committee's discussions with Hawaiian and Boeing Capital.
"The appointment of a trustee at the outset of a case of this magnitude is an extraordinary remedy," ALPA's filing said. "ALPA is concerned that the appointment of a trustee could undermine (Hawaiian's) ability to reorganize because the traveling public and industry may view such a step as a prelude to an eventual liquidation."
ALPA suggested instead of a trustee that the court should consider an intermediate measure such as the designation of a chief restructuring officer, examiner, or someone with broad authority over management.
The creditors committee is scheduled to file a response tomorrow giving its position on which side it supports in the trustee issue. The committee's decision is expected to be influential in how Bankruptcy Court Judge Robert Faris rules following the trustee hearing.
Boeing Capital will make its presentation to committee members and lawyers in New York today. Hawaiian representatives gave a six-hour presentation to the committee Monday in Los Angeles.
If Faris ultimately decides to appoint a trustee, the individual named will be left up to the U.S. Trustee's Office. One of the candidates who has been discussed among creditors is Michael McQuay, who resigned as executive vice president and chief operating officer in November 1997 to join Fiji-based Air Pacific as its managing director and chief executive officer. He is no longer with the airline.
Hawaiian also received an early indication yesterday on how much the legal proceedings might cost it in legal fees. New York-based law firm Akin Gump Strauss Hauer & Feld LLP, the lead counsel in the case, said in a filing yesterday it was billing the airline $143,347 for about 400 hours worked from March 21 through March 31. It also was requesting $7,508.37 in expenses. Under a first-day motion, Hawaiian is obligated to pay -- if there are no objections -- 80 percent of the hourly bill, $114,677.60 in this case, as well as the full expense amount. The remaining amount would be paid at the conclusion of the case.
Lisa Beckerman, a partner in the firm, charged the highest amount at $31,625 for 50.6 hours at her hourly rate of $625. The smallest hourly rate of the 21 law employees was $150 an hour.