Judge: Hawaiian may get court-appointed overseer HONOLULU (AP) =97 Cash-strapped Hawaiian Airlines should expect some form of= =20 court-appointed oversight as it continues to try and emerge from Chapter 11= =20 bankruptcy protection, a federal judge said Friday. U.S. Bankruptcy Court=20 Judge Robert J. Faris did not immediately rule on a motion by Boeing=20 Capital Corp. to have a trustee appointed to oversee daily operations of=20 the carrier. But Faris said a trustee or an examiner, who would investigate= =20 specific transactions, was likely and he was leaning against Hawaiian's=20 request to reject the motion. "I've got a limited number of tools in my=20 tool kit," he said. "My options are limited." He also urged Hawaiian and=20 Boeing =97 the carrier's main aircraft lessor =97 to continue working= together=20 to try and find a middle ground. Anil Patel, Boeing's director of aircraft= =20 financial services, said the lessor still sees a trustee as best for all=20 parties, but that both sides would continue talks. "We always try to figure= =20 out if there's a way to resolve things without litigation," he said. Hawaiian lead attorney John Karaczynski said he was confident that a=20 trustee to replace chairman and chief executive John Adams and the=20 airline's board of directors was an unlikely solution. "We're confident=20 that Judge Faris will rule the right result for this company," he said. "He= =20 recognizes the dire consequences that this would have for the company."=20 Hawaiian, which filed for protection from its creditors on March 21,=20 contends that having a trustee appointed would place a stigma of failure on= =20 the airline and drive away business at a crucial time for bookings and=20 delay implementation of what it believes is a sound business plan for=20 saving the airline. Seattle-based Boeing Capital, the financial arm of=20 Boeing Co., has sought to have a trustee appointed to oversee daily=20 operations, accusing Adams and the board of directors of insider dealings=20 and mismanagement that have led to the carrier's financial hardship.=20 Attorneys for Boeing and a creditors' committee of labor representatives=20 that has sided with the lessor repeated those claims Friday. "There is no confidence in John Adams running this airline," said Brett=20 Miller, an attorney representing the creditors' committee. A central issue= =20 has been Hawaiian's payment of $25 million to shareholders in a July 2002=20 tender offer that came at a time when the airline also was approaching=20 lessors seeking $20 million in cost reductions. According to court=20 documents, $17 million went to shareholders of AIP LLC, Adams' controlling= =20 partnership in Hawaiian Airlines. Hawaiian has denied any wrongdoing or=20 mismanagement and called the stock buyback a legitimate corporate action=20 meant to reward shareholders and restore investor confidence after the=20 carrier's failed merger with rival Aloha Airlines. "Benefiting one's=20 shareholders is not an inappropriate corporate action," Karaczynski said.=20 Boeing attorney Susan Foster argued that the payment came at a time when=20 air industry experts were forecasting reduced travel, accusing top brass at= =20 Hawaiian of ignoring such projections. She accused Adams of manipulating=20 facts and "railroading the board into approving this transaction." She also= =20 noted that soon after the failed merger with Aloha in March 2002, Hawaiian= =20 came forth with an aggressive new strategic plan that included the addition= =20 of new routes and an assumption of concessions from its aircraft lessors. Regardless of whether it was a sound strategy, "it requires capital, and=20 what did they do with that capital and that cash? They gave it to the=20 shareholders." Karaczynski denied that the board was manipulated and said=20 it was presented with the proper information to make its decision. "This=20 board did not simply rubber stamp the decision to move forward with this=20 tender offer," he said. Faris said he was impressed by the presentations=20 put on by both sides but also noted that he had concerns about the tender=20 offer. He gave no indication when he would issue a ruling. Although his=20 decision could be appealed in U.S. District Court, attorneys said it would= =20 take a high burden of proof to overturn the ruling and an appeal would be=20 impractical because of time restraints and deadlines inherent in bankruptcy= =20 proceedings. *************************************************** 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 *********************************************************