HONOLULU -- Hawaiian Airlines and one of its main creditors were in court Thursday over a motion to have a trustee placed in charge of the carrier as it attempts to emerge from Chapter 11 bankruptcy protection.
Boeing Capital, Hawaiian's main aircraft lessor, has requested the trustee, accusing airline management of extensive self-dealing and inherent conflicts of interests.
Attorneys for Boeing, which leases planes to Hawaiian, said Hawaiian Chief Executive Officer John Adams manipulated cash accounts and earnings projections last year so the airline would buy back his stock at inflated prices.
Hawaiian said the decisions were legal, reasonable and public and that Boeing may be trying to show the industry that it's no pushover with airlines that want to renegotiate aircraft leases.
"Boeing wants to make a clear-cut statement that it's ready to play country hardball," Hawaiian attorney John Karaczynski said.
Boeing asked bankruptcy Judge Robert Faris to replace Adams and Hawaiian's board with a trustee. Hawaiian said that might kill the airline.
"If people believe it is one step away from liquidation, people will stop buying tickets," Karaczynski said.
Boeing is not the only creditor demanding Adams leave or be replaced. A committee of creditors said that if he does leave there are people waiting in line to either buy or invest heavily in the airline.
Hawaiian's lawyers said Adams saved the airline once before and remains the best man to save it again.
U.S. Bankruptcy Court Judge Robert Faris is scheduled to hear more testimony Friday.
Copyright 2007 by TheHawaiiChannel.com. The Associated Press contributed to this report. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
