Yucaipa Cos. outbid Hawaiian Airlines in an auction yesterday for Aloha Airlines' intellectual property rights, paving the way for Mesa Air Group to re-brand its go! planes with the Aloha name if the sale receives court approval today.

A hearing is set for 9:30 a.m. before Bankruptcy Judge Lloyd King.

Yucaipa, the former controlling shareholder for Aloha, won with a winning credit bid of $750,000, which reduced the $113 million it is owed by Aloha. Hawaiian's all-cash bid was $575,000, which was the required overbid after Yucaipa had initiated the auction process as the so-called “;stalking horse”; with a bid of $525,000.

If King approves yesterday's auction sale, then Mesa will be able to replace go! on its 50-seat CRJ-200s with the Aloha name by virtue of a lawsuit settlement it announced last Friday with Yucaipa.

Under terms of the settlement, whose details were disclosed further yesterday in a Securities Exchange Commission filing, Mesa and Yucaipa agreed to establish a licensing and profit-sharing agreement. Yucaipa will license the Aloha name to Mesa for 10 years in exchange for royalty payments from Mesa of 1 percent of Mesa's interisland passenger ticket revenue, subject to a minimum annual revenue payment of $600,000. In addition, Mesa will pay Yucaipa 30 percent of Mesa's pretax operating profits from Mesa's Hawaii operations, excluding the revenue payments.

Other terms of the settlement, which were previously announced, include Mesa paying Yucaipa $2 million; issuing Yucaipa 10 percent, or approximately 2.7 million shares, of Mesa's common stock; and providing interisland travel benefits to former Aloha employees.

Mesa's stock, trading at 20 cents before the settlement was announced last week, has more than doubled since that time and closed yesterday at 48 cents on the Nasdaq Stock Market after trading as high as 56 cents.

If Mesa ceases interisland flight operations in Hawaii, Mesa has the right to terminate the licensing and profit-sharing arrangement, according to the regulatory filing. However, Mesa must provide Yucaipa with a $5 million promissory note payable over five years, at LIBOR plus 350 basis points interest, reset quarterly, that will become payable if Mesa ceases operations in Hawaii or breaches the settlement agreement. If Mesa ceases Hawaii operations after the first five years, then the amount remaining on the note would be the principal remaining at the time interisland service stops.

Aloha received court approval in June to sell its lawsuit against Phoenix-based Mesa to Yucaipa for a $10 million credit bid that reduced the amount that Aloha owed Yucaipa. Aloha had sued Mesa in 2007 alleging that Mesa misused Aloha's confidential information obtained as a potential investor during Aloha's first bankruptcy. Aloha also accused Mesa of predatory pricing designed to run Aloha out of business.

Aloha eventually filed for Chapter 11 bankruptcy on March 20 of this year before shutting down completely 11 days later and ultimately converting its case to a Chapter 7 liquidation.

Separately, Mesa said yesterday it has finalized an agreement with Fokker Services Inc., for the sale, management and repair of Mesa's DHC8-200 spare parts inventories. Under the agreement, Fokker will immediately pay Mesa $3 million and Mesa will receive approximately $1.6 million in deferred monthly fee payments under the maintenance agreement.