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Hawaiian Air group alters
competing reorganization
plan
A group of Hawaiian Airlines employees, creditors, investors and venture capitalists has amended its reorganization plan for the bankrupt carrier in a late bid to overtake a competing proposal.
Hawaiian Airlines pilot Robert Konop, the Hawaiian Reorganization Committee and Hawaiian Investment Partners Group LLC submitted a revised plan late Thursday that is being financed by St. Louis-based Barron Group LLC, a merger and acquisition firm that is committing $200 million in cash to Hawaiian in exchange for a controlling equity interest in the airline.
The most significant change in the plan is that Hawaiian's stock would get diluted by about 95 percent as opposed to 30 to 40 percent under the previous plan. The dilution occurs because of Hawaiian Airlines' decreased value after payment of claims, which may include a payout of up to $129 million to the Internal Revenue Service.
Under the plan, Hawaiian Airlines would continue all labor contracts and pensions, and pay all creditors 100 percent of their eligible claims.
The amended plan also said that reorganization specialist Jeffrey Brodsky, a former Hawaiian Airlines director and a principal of New York-based Quest Turnaround, has agreed to join the company's board, along with state House Speaker Calvin Say.
A Bankruptcy Court hearing will be held Dec. 10 to determine if the plan is eligible to go to creditors for a vote.
The group faces an uphill battle because a plan already sent to Hawaiian's creditors for a vote has the backing of Hawaiian Airlines trustee Joshua Gotbaum, the unsecured creditors' committee, parent company Hawaiian Holdings Inc. and investors group RC Aviation LLC.
A hearing to confirm the winning reorganization plan for Hawaiian is set for Jan. 25.
