Hawaiian Telcom’s hearing to confirm its reorganization plan yesterday came up against strong opposition from the committee of unsecured creditors.

The hearing began yesterday morning before U.S. Bankruptcy Judge Lloyd King, continues today and might last until Friday.

HawTel, with the support of its secured lenders, plans to convert about $590 million of its senior secured debt into equity and a $300 million loan. That would reduce its debt by about $790 million — to $300 million from $1.1 billion.

A key part of HawTel’s reorganization plan is to revalue the company at about $460 million, which would be factored in accounting and help lower its monthly losses.

But at issue is exactly how HawTel came up with the value of the company, which took up the entire day’s worth of testimony yesterday. The committee says HawTel and lenders have “reverse engineered” the value of the company’s real estate holdings.

Nearly 19,000 easements — the areas through which HawTel’s network of cables and fiber run, typically on poles shared with Hawaiian Electric Co. — were valued at nothing when they would cost more than $54.5 million to reacquire, the committee said.

Some 55 of HawTel’s central real estate offices, which connect the lines to customers, were also undervalued, says the committee.

Instead of $460 million, the committee says its experts valued HawTel’s net value at $682.4 million. Thus, the committee alleges that it is being shortchanged of some $139.3 million.

Under the plan, which represents landlords, vendors and others owed money by HawTel, the lenders would receive more than their fair share of assets, the committee said.

The committee also said it was unfair to issue warrants, which are more speculative, to senior noteholders instead of straight equity. It also objected to HawTel’s plan to offer its managers a 10 percent pay bonus as incentive if target goals are met next year.

Witnesses who went up to the stand yesterday included Eric Yeaman, HawTel’s chief executive officer; Robert Reich, chief financial officer; Kevin Nystrom, chief operating officer; Michael Edl, senior vice president of network services; and Nick Melton, managing director of Lazard Freres & Co., HawTel’s financial consultant. Lazard valued HawTel at about $460 million.

Confirmation of the plan is also opposed by the Office of the U.S. Trustee and Sandwich Isles Communications, which offered at one time to acquire HawTel.

HawTel expects to emerge from bankruptcy next spring with at least $50 million in cash, and generate income starting in 2011. HawTel is also banking on the success of its launch of Next Generation Television services next year to help its revenue grow. The company currently has about 1,450 employees.

HawTel, the state’s largest telecommunications provider, began more than 125 years ago in Hawaii as a division of GTE Corp. before becoming Verizon Communications. The Carlyle Group of Washington, D.C., acquired the company in 2005 for $1.6 billion.

After court confirmation, the plan still would need approval by the state Public Utilities Commission, which could take six months or more.