D.C. consultant will
lead Hawaiian AirAn investment banker
will become trustee as
the front-runner bows out
In a move that surprised interested parties, the U.S. Trustee's Office announced late yesterday it was appointing investment banker and airline consultant Joshua Gotbaum as the new trustee at Hawaiian Airlines.
The selection of the 51-year-old Gotbaum, previously mentioned as a front-runner, was unexpected since earlier in the week, several sources said recently retired United Airlines executive Christopher Bowers would get the nod.
Gotbaum's most recent position had been as chief executive of the September 11th Fund, a charity established to meet the needs of victims, families and communities.
"I'm actively excited," Gotbaum said last night from his Washington, D.C., home. "Hawaiian is very important both to Hawaii and the airline industry. I'm looking forward to working with management, the employees, the creditors and everybody else to restore it to its rightful place in Hawaii and the industry."
U.S. Trustee Steven Katzman, who repeatedly had said he was committed to getting a new trustee in place as soon as possible, decided to implement his contingency plan after Bowers pulled out of the running.
"Mr. Bowers withdrew because of logistical issues that could not be resolved that precluded his appointment," Katzman said. "They had no bearings on his qualifications or his ability to serve as a trustee."
Katzman declined to elaborate on the logistical issues, but sources said it had to do with a noncompete clause with United and also may have included benefits he might have been entitled to following 30 years of service with the airline.
Bowers, who had an extensive sales and marketing background, retired Monday.
Katzman said Bowers withdrew his name prior to Gotbaum's selection, but would not go into further details.
Gotbaum, who officially will start work Monday, will replace former Liberty House executive John Monahan, who resigned June 24. Monahan had remained on the job until a replacement could be found.
Like Monahan, Gotbaum has never worked for an airline. However, Gotbaum spent 13 years as an investment banker with Lazard Freres & Co. in New York and London, where he provided advice to airlines on mergers, acquisitions, bankruptcies and restructuring. He consulted with Eastern, Braniff, Pan American, British Airways and Air France.
Gotbaum also is an acquaintance of Mark Dunkerley, the Hawaiian president and chief operating officer who remains as the airline's highest-ranking executive after the departure of Chairman and CEO John Adams. Gotbaum came in contact with Dunkerley more than a decade ago when Dunkerley worked for British Airways in Washington, D.C., and Gotbaum was at Lazard in London.
"British Airways was a client of ours," Gotbaum said.
Curtis Ching, the Honolulu-based trial attorney with the Trustee's Office who coordinated the search, said the Trustee's Office started taking a closer look at Gotbaum "within the last couple days.
"We thought (Bowers) would have been a very fine appointment, but we also feel that Josh Gotbaum will do a really fine job," Ching said.
Katzman said it was extremely difficult finding someone with all the parameters that the U.S. Trustee's Office was seeking, but said he is pleased with Gotbaum's appointment.
"I believe his background establishes his ability to serve as successor trustee to Hawaiian Airlines and to do a fine job in whatever all his duties will entail," Katzman said. "We were blessed with a group of outstanding candidates, and Mr. Gotbaum was one of them."
Gotbaum, who comes from a prominent family, received his Bachelor of Arts degree from Stanford University and his joint law and master's of public policy degrees from the Kennedy School of Government at Harvard University.
His stepmother, Betsy, is a public advocate in New York City, and his father, Victor, is a former New York City labor leader.
Gotbaum served as executive associate director and controller in the U.S. Office of Management and Budget in the Clinton administration. Before that he was assistant secretary for economic policy in the Treasury and assistant secretary for economic security in the Department of Defense. He worked at Lazard Freres from 1981 to 1994 after serving for two years in the Carter administration.
Boeing Capital Corp. spokesman Russ Young said the aircraft lessor, which leases Hawaiian 16 of its 27 planes, said he was glad to see the trustee situation get settled. "He's not someone we're real familiar with, but he is the trustee's pick," Young said. "So now we can all turn our attention back to the restructuring of the airline."
Boeing Capital had forced the trustee issue when it filed a motion in U.S. Bankruptcy Court 10 days after Hawaiian filed for Chapter 11 reorganization bankruptcy on March 21. Boeing accused Adams of insider trading and self-dealing. U.S. Bankruptcy Court Judge Robert Faris subsequently ordered that a trustee be appointed.
"We were very enthusiastic about John Monahan, and we were equally enthusiastic about Chris Bowers," Young said. "The important thing is that we have a trustee in place and we can go forward now."
Brett Miller, a New York-based attorney for the unsecured-creditors committee, said Bowers' appointment was "acceptable to the committee."
"The committee welcomes the opportunity to work with Mr. Gotbaum as the Chapter 11 trustee," said Miller, who is with the law firm Otterbourg, Steindler, Houston & Rosen.