Hawaiian Air
trustee resignsJohn Monahan cites
personal reasons for
stepping down after less
than a month
John Monahan, the former Liberty House executive chosen to be trustee of Hawaiian Airlines, abruptly resigned from the position yesterday after less than a month on the job.
The 52-year-old Monahan said he was stepping down for personal reasons that required his full attention. He did not elaborate, but a source familiar with the situation said it was for health reasons. Monahan was out of the office part of last week and on Monday, another source said.
Curtis Ching, a Honolulu-based U.S. Trustee's Office trial attorney who had coordinated the trustee search, stressed that the resignation was not due to dissatisfaction with Monahan's reorganization efforts.
"It had nothing to do with John's abilities, his performance, the work he had done," Ching said. "This was not related to any of those types of issues."
Monahan did not return several phone calls, but issued a statement saying he enjoyed his brief association with people at Hawaiian.
"(I) will miss the opportunity to be a part of what I'm confident will be a successful reorganization of the airline," he said.
Hawaiian, which filed for Chapter 11 bankruptcy protection on March 21, had been under the former Liberty House president and chief executive officer's control since June 2.
The appointment of a trustee was ordered by U.S. Bankruptcy Court Judge Robert Faris on May 16 after he ruled that Hawaiian Chairman and CEO John Adams consistently had put the interests of shareholders ahead of those of creditors.
San Diego-based U.S. Trustee Steven Katzman, who is on Kauai attending a 9th Circuit Judicial Conference, said he hopes to have a new trustee named by the end of this week.
"We're sorry to see (Monahan) go because, based on what we've seen of him, we felt he was very suited for the position," Katzman said. "But we also have a number of very qualified applicants to consider for the position, and we're moving with all possible speed."
Katzman said the Trustee's Office will be working with the existing applicant pool to pick Monahan's replacement.
"We are not resoliciting resumes at this point, but if anyone's interested, they're welcome to submit their resumes," Katzman said.
"We've already been in contact with the parties in interest (aircraft lessor Boeing Capital Corp. and the creditors committee), and we'll defer weight to their recommendations."
Among the candidates receiving attention last time were Rono Dutta, former president of United Airlines parent UAL Corp.; Bill Compton, former CEO of Trans World Airlines; and Joshua Gotbaum, a former executive associate director and controller of the U.S. Office of Management and Budget, who is also an investment banker with airline and restructuring experience.
Gotbaum, reached at his Washington, D.C., home last night, said he was still interested in the position, but declined to talk further.
Dutta did not return a phone call and Compton could not be reached for comment.
Mark Dunkerley, Hawaiian's president and chief operating officer, said the airline is eager to move forward with a successor as soon as possible.
"In the short time we have worked with John, we've been encouraged by his constructive approach," Dunkerley said. "He certainly has the right background and skills to have helped the airline through its reorganization process, so we're sorry to see him go."
Boeing Capital spokesman Russ Young said Monahan's resignation came as a surprise and characterized the limited contact the aircraft lessor had with Monahan as positive.
Young also said Boeing Capital would be willing to offer Hawaiian a third extension to negotiate aircraft leases. Last week Boeing Capital agreed to a second 30-day extension to July 31.
"We're really interested in a secure long-term home for the airplanes, and being able to work out a long-term agreement takes into account both of our interests," Young said.
Los Angeles-based attorney Bruce Bennett, who was Liberty House's chief counsel during the retailer's three-year reorganization, said Monahan laid the groundwork at Hawaiian for a successful reorganization.
"John absolutely hit the ground running," said Bennett, who had been chosen as Monahan's Hawaiian attorney but whose appointment hadn't been approved yet by the court. "There was progress made in many areas, and a number of projects were started that I expect will be continued by whoever is ultimately chosen to succeed him.
"We do not believe his resignation will have any effect whatsoever on the continued operation or the ultimate success of the reorganization case."