Hawaiian Air creditors
vet reorg plans
The Hawaiian Airlines bankruptcy case entered a new phase yesterday as the unsecured creditors' committee heard separate two-hour presentations in New York City from competing parties planning to participate in the carrier's reorganization.
Corporate Recovery Group LLC and Boeing Capital Corp., which together filed a reorganization plan in U.S. Bankruptcy Court last week, went first and asked for the support of the committee. Vx Capital Partners, a San Francisco-based private finance firm that invests in commercial aircraft and aviation assets, followed with its own two-hour presentation and said it was planning to invest between $25 million and $40 million.
"I thought we had a very constructive meeting," said Ron Orr, a principal with Wilson, Wyo.-based Corporate Recovery Group, which plans to invest $30 million in the airline in exchange for 90 percent ownership. "They listened and asked questions and I think we satisfied them with our answers. But only they can tell if that's true or not."
Vx Capital, represented by co-founder Stephen Compagni Portis, was the second presenter and assured the committee that its deal would top the one offered by Corporate Recovery Group and Boeing Capital, according to people familiar with the situation. Vx also said it was still considering former Hawaiian Airlines CEO Paul Casey among other possible CEO candidates. Vx did not say when it would file its reorganization plan. Compagni Portis was unavailable for comment.
Orr said the Corporate Recovery-Boeing Capital tandem, which last week had its request for an expedited Feb. 27 hearing denied by U.S. Bankruptcy Judge Robert Faris, said it still plans to pursue a confirmation hearing as quickly as possible.
"When we go in April 1 (the new hearing date for setting up procedures), we're going to ask for the shortest possible dates we can get," Orr said. "We think we can confirm immediately (the original target date was May 3), and we will do it as quickly as the court will let us."
Former Hawaiian Airlines CEO Bruce Nobles, who Corporate Recovery and Boeing Capital have tapped in the reorganization plan to be the airline's CEO, said talk about the company cashing in on an initial public offering shortly after taking it private is premature.
"One exit strategy for investors would be to take the company public," Nobles said. "But the company has to be profitable and the market conditions have to be right. That's way in the future. Theoretically, it could be relatively short, but it's nothing we can predict. That's not our worry right now. We want to increase the value."
Boeing Capital spokesman Russ Young said it was no surprise that the creditors' committee, financial advisers and attorneys at the meeting took the plan under advisement.
"We didn't get an immediate answer, nor did we expect them to give one," Young said. "We showed them the strength of our plan and I'm sure they'll continue discussion between now and April 1 and the plan confirmation."
Jim Giddings, chairman of the Air Line Pilots Association Hawaiian Airlines unit, said he thought the Corporate Recovery/Boeing Capital's first meeting with the creditors since filing the plan was a "very significant" step in the process.
"Things are sort of filtering out and people are figuring out where they're at," said Giddings, who wasn't at the meeting but was later briefed. "I think people gained more information and insight from this meeting to talk to other people and to figure out where to go from there."
