Nominations in
for airline trustee
Boeing Capital Corp. and the unsecured creditors committee, unable to reach common ground on trustee candidates for Hawaiian Airlines, each submitted separate lists of three candidates yesterday to the Honolulu U.S. Trustee's Office.
Michael McQuay, who had talked to both parties and was considered a leading candidate for the position, was not on either list. The former vice president and chief operating officer of Hawaiian was declared ineligible for consideration because he owes the airline more than $200,000 through a 1996 equity rights offering. McQuay is president of Dallas-based Bombardier Business Jet Solutions.
That equity rights offering came up during a meeting between Hawaiian and creditors yesterday at the U.S. Trustee's Office. In the meeting, Hawaiian Chief Financial Officer Christine Deister said McQuay, five other former officers and one current officer collectively owe Hawaiian about $1.6 million for their participation in the rights offering. Their promissory notes come due Feb. 2, 2005, she said.
Deister brought up the equity rights offering because Hawaiian listed it in the wrong balance sheet account when the airline filed its statement of financial affairs and schedules in U.S. Bankruptcy Court earlier this month. The discovery means Hawaiian actually had $1.6 million more in assets, or a revised $175.8 million, at the time of its March 21 Chapter 11 reorganization filing.
Hawaiian's equity rights offering, which raised approximately $39.3 million in equity capital, allowed officers to sign a promissory note to purchase a certain amount of company stock at $3.25 per share. The company would then hold onto the stock as collateral and charge monthly interest that would be added onto the note. The note would be payable when the stock was sold.
McQuay, contacted at his Richardson, Texas, home last night, said he would have loved the opportunity to return to his birth state as a trustee.
"I want to reiterate I remain absolutely confident the company will emerge from bankruptcy with the selection of a good trustee," McQuay said.
The elimination of McQuay comes a couple days after former Hawaiian Chief Executive Officer Paul Casey, who's owed $923,000 in severance, withdrew his name from consideration.
Curtis Ching, a trial attorney with the Trustee's Office who is coordinating the search, said he's received names of 18 candidates but none from the airline. Ching said he's informally spoken to some candidates and that formal interviews will take place next week. He said he's still hopeful a trustee can be named by Friday, but said Monday's Memorial Day holiday could extend the process into the following week. The final decision will be made by San Diego-based U.S. Trustee Steven Katzman, who took over that position Monday.
Boeing Capital spokesman Russ Young, who declined to discuss any of the names, said the aircraft lessor feels good about its candidates.
"We feel all three have the skills, the expertise, the energy and the integrity that's required to lead Hawaiian to a successful reorganization," Young said. "Now, it's in the hands of the trustee. It will be their judgment as for how long it's going to take, but we're confident they'll work quickly but take the kind of time they need to make a good choice."
Both Ching and Young also declined to reveal if there were any duplications on lists submitted by Boeing Capital and the creditors.
Hawaiian Airlines