New names surface in
Hawaiian Air bankruptcyTwo public companies and
a hedge fund are among the finalists
to partner in a plan to rebuild the airline
Hawaiian Airlines' trustee and the carrier's unsecured creditors committee have narrowed their choices for a reorganization plan partner to two publicly traded investment companies, a hedge fund and a private equity firm headed by the former chief of America West Airlines, according to sources close to the situation.
Trustee Joshua Gotbaum and the committee are planning to team up with one of the four parties in time to meet the federal Bankruptcy Court's July 29 reorganization plan filing deadline. Although other potential investors have or will be filing plans, some insiders say that joining forces with the trustee and the committee may give that party an edge in getting a plan confirmed later this year.
The four Gotbaum-committee finalists, which emerged from an initial group of 13, are:
>> Jefferies & Co. Inc., the principal operating subsidiary of holding company Jefferies Group Inc., a New York-based investment bank that serves midsized companies and institutional investors. Founded in 1962, Jefferies trades on the New York Stock Exchange and has nearly 1,600 employees worldwide and a market capitalization of more than $1.6 billion.
>> American Capital Strategies Ltd., a Bethesda, Md., buyout and financing fund with capital resources exceeding $3 billion. American Capital, which trades on the Nasdaq National Market, has 132 employees, and a market capitalization of about $2.3 billion.Representatives from Wexford and Indigo said they were not in a position to comment while calls to the other two groups were not returned.>> Wexford Capital LLC, a Greenwich, Conn.-based private equity and hedge fund company that specializes in distressed high-yield hedge funds. The 40-employee company was formed in 1994 and has experience in bankrupt and transportation companies, among other sectors.
>> Indigo Partners LLC, a Phoenix-based private equity firm founded by managing partner William Franke, the former chairman and CEO of America West and current chairman of Singapore Airlines' low-cost start-up, Tiger Airways.
Gotbaum and creditors committee officials declined to identify the finalists. However, Gotbaum said that the proposals they received "are better than anything Hawaiian has seen thus far."
"We are working to develop the proposal that best serves Hawaiian's creditors and other constituencies and to submit our recommended plan of reorganization to the bankruptcy court at the end of the month," he said.
It's uncertain how many groups eventually will file plans by the deadline, but there will be at least five, including the trustee-creditors committee proposal.
RC Aviation LLC, a 16-member hedge fund investor group formed by San Diego-based Ranch Capital LLC, said it will file a plan to replace a plan previously filed by Hawaiian Airlines parent Hawaiian Holdings Inc. Lawrence Hershfield, the chief executive officer of Ranch Capital, became the new president and CEO of Hawaiian Holdings last month when RC Aviation purchased 10 million shares of Hawaiian Holdings.
Boeing Capital Corp., the primary lessor of Hawaiian Airlines with leases on 14 aircraft in the 25-plane fleet, and Wilson, Wyo.-based turnaround firm Corporate Recovery Group LLC filed a plan in February but don't have to file by July 29 since their plan already is on record. Companies have until Aug. 9 to modify plans.
The Boeing-CRG plan is the only one filed so far that would not compensate Hawaiian's existing shareholders, and CRG principal Ron Orr said Hawaiian Airlines' string of 14 consecutive months of operating profits hasn't changed his group's opinion.
"We think the value of the company has increased since we made our bid, but we still think the company is insolvent," Orr said.
Hawaiian Airlines pilot Robert Konop, who has about 20 years experience with the company, earlier this month filed a reorganization plan that modified one he filed in February.
Another plan was jointly filed in March by the Hawaiian Reorganization Committee, comprising some airline employees and small creditors, and the Hawaiian Investment Partners Group LLC, which is made up of investors and venture capitalists.
Vx Capital Partners, a San Francisco-based firm that had been one of five finalists on the Gotbaum-committee short list before pulling out, has decided not to file its own plan, according to Vx partner Stephen Compagni Portis.
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