Hawaiian Airlines
hearing delayed
A U.S. Bankruptcy Court Judge has denied a motion from Corporate Recovery Group LLC and Boeing Capital Corp. for an expedited hearing on its joint reorganization plan.
Judge Robert Faris said in a two-page ruling yesterday that "prompt conclusion of this case is a laudable goal, but it must be weighed against the right of the creditors and other parties in interest to have an adequate opportunity to analyze and respond" to the motion.
Normally, a 28-day notice is required by the court, but Corporate Recovery Group and Boeing Capital said in their Feb. 10 filing that they were seeking a Feb. 27 hearing.
Faris said that the court will consider the motion "only upon full notice to creditors and parties in interest."
Late yesterday, Corporate Recovery Group and Boeing Capital filed a motion seeking an April 1 hearing. The motion also said that other hearing dates and deadlines would be discussed with the appropriate parties prior to the hearing.
"We had hoped for an expedited process," Boeing Capital spokesman Russ Young said. "We are pleased that the judge points out that prompt conclusion of the case is a laudable goal, and we will proceed as the court requires us to do. Everybody agrees that prompt resolution and emergence from bankruptcy is in everybody's best interest."
The judge also said in his ruling that Corporate Recovery Group and Boeing Capital were asking the court to make decisions "that were not merely procedural and may have far-reaching implications, such as approval of a 'topping fee.' "
In one of their filings earlier this week, Corporate Recovery Group and Boeing Capital requested a $5.4 million topping fee as the party initiating the process. If that amount is approved by Faris, the Boeing Capital-Corporate Recovery group would receive that amount if another reorganization plan is confirmed. Hawaiian Airlines trustee Joshua Gotbaum filed a motion seeking additional study of the topping fee, saying it represents 18 percent of the total investment (of $30 million) that Corporate Recovery Group would provide under its plan and that all parties should have a chance to review the topping fee without the court rushing to judgment.
In other developments:
>> A San Francisco-based hedge fund that had acquired 5.1 percent of parent company Hawaiian Holdings Inc.'s stock for "investment purchases," said in a Securities and Exchange Commission filing Wednesday that it has reduced its stake to 4.2 percent.
Lonestar Partners LP, which earlier spent nearly $2 million in acquiring 1.4 million of Hawaiian Holdings' shares and held 5.1 percent of the company's stock as of mid-December, said it had reduced its holdings less than 5 percent as of Dec. 31. The company reported it sold 268,400 shares at prices ranging from $2.62 and $4 between Dec. 30 and Feb. 5. Lonestar also said it has been holding discussions with various shareholders and other constituencies, as well as professional advisers, since its December filing in order to protect its interests as a stockholder in Hawaiian Holdings. Lonestar said its interests "may not be adequately represented and protected" by either Hawaiian Holdings or by the trustee and that it may take future action.
>> Hawaiian Holdings, which represents about 4,000 shareholders, confirmed in an SEC filing yesterday that it intends to file a reorganization plan. It had been anticipated that Hawaiian Holdings would file a plan since ousted Hawaiian Airlines chief John Adams, whose AIP partnership is the majority shareholder with just more than half the company, doesn't want the existing shares to be canceled. Hawaiian Holdings said in its filing that the proposed reorganization plan of Corporate Recovery Group and Boeing Capital gave no value to the shares and that Hawaiian Holdings would formulate its own plan that will "provide for a more equitable treatment of all constituencies involved in the reorganization, including existing holders" of Hawaiian Holdings' stock.
