Creditor accuses carrier's management of improper dealings HONOLULU (AP) =97 Top executives at Hawaiian Airlines have engaged in=20 improper and reckless decisions that have led the company to financial=20 hardship, attorneys for one of the carrier's main creditors told a=20 bankruptcy judge on Thursday. Boeing Capital Corp. is seeking to have an=20 independent trustee placed in charge of daily operations while the airline= =20 attempts to emerge from Chapter 11 bankruptcy protection. Hawaiian chairman= =20 and chief executive John W. Adams and the board of directors have engaged=20 in a "remarkable pattern of self dealing and conflicts of interest," Boeing= =20 attorney Steven M. Hedberg said. The airline has denied any wrongdoing. Hawaiian attorney John Karaczynski said all of the company's dealings have= =20 been legitimate transactions approved by the board of directors and=20 properly disclosed. "There's been no dishonesty," he said. "There's been no= =20 incompetency and clearly, there's been no mismanagement." Hawaiian filed=20 for Chapter 11 bankruptcy protection on March 21. Seattle-based Boeing=20 Capital, the financial arm of airplane builder Boeing Co., is the lessor=20 for 16 of Hawaiian's airliners. International Lease Finance Corp. leases=20 four aircraft to Hawaiian and Ansett Worldwide Aviation Inc. seven. Thursday's court session focused on Hawaiian's fiscal situation in the=20 months following its failed merger with rival Aloha Airlines last year.=20 Specifically, Boeing has been critical of a payment of about $25 million to= =20 shareholders in a July 2002 tender offer that came at a time when the=20 airline also was approaching lessors seeking $20 million in cost=20 reductions. Hedberg said company officials knew they couldn't afford the=20 buyback but went ahead with it anyway to the benefit of Adams and others.=20 According to court documents, $17 million went to stockholders of Adams'=20 partnership AIP LLC. Adams has said the payment was necessary so that=20 shareholders who had bought Hawaiian shares anticipating the merger would=20 not feel cheated. Karaczynski said the buyback also was needed to restore investor confidence= =20 in the airline after the merger failed. He said Boeing has not presented=20 any evidence to prove that a trustee is necessary, adding that the=20 appointment of an overseer would be "nothing short of an unmitigated=20 disaster." Hawaiian contends that having a trustee appointed would place a= =20 stigma of failure on the airline and drive away business at a crucial time= =20 for bookings and delay implementation of what managers believe is a sound=20 business plan for saving the airline. A creditors' committee that includes= =20 pilots, flight attendants and other labor representatives has sided with=20 Boeing. Brett Miller, an attorney representing the creditors' committee,=20 said Hawaiian's "pattern of self dealing" has left Boeing with no choice=20 but to seek the ouster of top management. "There is no investor confidence= =20 in this debtor," he said. Hawaiian has said bankruptcy was forced on the company by Boeing's refusal= =20 to renegotiate airplane lease agreements that were signed between 1999 and= =20 2001 =97 before the downturn in air travel after the Sept. 11, 2001,=20 terrorist attacks. Hawaiian this month reached renegotiated lease=20 agreements with Ansett and International Lease, which Karaczynski touted as= =20 a "loud statement of support." "There is clearly movement between Hawaiian= =20 Airlines and those two lessors to resolve things and move forward," he=20 said. However, Ansett attorney Sheldon Solow told the court that the lessor= =20 is simply trying to seek a "fair economic transaction" with Hawaiian and=20 takes no stance on whether a trustee is needed. The hearing on the motion=20 to appoint a trustee is scheduled to continue Friday before U.S. Bankruptcy= =20 Court Judge Robert J. Faris. *************************************************** The owner of Roger's Trinbago Site/TnTisland.com Roj (Roger James) escape email mailto:ejames@xxxxxxxxx Trinbago site: www.tntisland.com Carib Brass Ctn site www.tntisland.com/caribbeanbrassconnection/ Steel Expressions www.mts.net/~ejames/se/ Site of the Week: http://www.cso.gov.tt TnT Webdirectory: http://search.co.tt *********************************************************