Newsroom / News Releases September 22, 2004
Hawaiian Airlines Trustee Reaches Agreement with SEC
Settlement Resolves Investigation Without Any Payments By Airline
HONOLULU -- Hawaiian Airlines Trustee Joshua Gotbaum today announced a settlement agreement with the United States Securities and Exchange Commission (SEC) that resolves the SEC's investigation of a 2002 $25 million self-tender stock transaction. Under the settlement, the SEC will not file any claim or seek any monetary penalties against Hawaiian Airlines and the airline pledges to comply with tender offer disclosure rules if it should ever again make a public tender offer.
The self-tender offer was undertaken by Hawaiian Airlines in 2002, when the airline was controlled by then-CEO and Board Chair John Adams. Questions concerning the propriety of the tender offer prompted the bankruptcy court to remove Mr. Adams and appoint a trustee in the company's bankruptcy case. The trustee was charged, among other matters, with investigating the tender offer, and this investigation led trustee Joshua Gotbaum to file a lawsuit against Adams, which remains outstanding.
In announcing the agreement, Gotbaum said, "For more than a year, we have worked cooperatively with the SEC, and I'm pleased they agree that the airline should not pay for violations committed by its now-removed CEO and Board Chair. Our agreement will avoid any potential litigation or claims by the SEC and will help speed Hawaiian's successful exit from bankruptcy."
The settlement with Hawaiian Airlines, which is subject to court approval, ends the SEC's investigation of the airline, under which the SEC concluded that the 2002 transaction violated SEC rules for tender offers.
Under the agreement, the airline will enter into an Administrative Order that requires the company to refrain from any future violations of the tender offer rules. The agreement imposes no monetary penalties on the company, and the SEC will not be filing a claim against the airline in its bankruptcy case.
If no objection to the agreement is filed within fifteen days, Gotbaum has requested that the bankruptcy court approve the agreement without the need for any hearing.
Hawaiian Airlines, the nation's number one on-time carrier, is recognized as one of the best airlines in America. Business travelers recently surveyed by Condé Nast Traveler rated Hawaiian Airlines as having the best in-flight service and meals of any U.S. carrier. In addition, Hawaiian is ranked as the nation's fifth best airline overall by Travel + Leisure, ahead of every other carrier flying to Hawaii.
Celebrating its 75th year of continuous service, Hawaiian Airlines is Hawaii's biggest and longest-serving airline, and the second largest provider of passenger air service between Hawaii and the mainland U.S. Hawaiian offers nonstop service to Hawaii from more mainland U.S. gateways than any other airline. Hawaiian also provides approximately 117 daily jet flights among the Hawaiian Islands, as well as service to Australia, American Samoa and Tahiti.
Hawaiian Airlines, Inc., is a subsidiary of Hawaiian Holdings, Inc. (AMEX and PCX: HA). Since the appointment of a bankruptcy trustee in May 2003, Hawaiian Holdings has had no involvement in the management of Hawaiian Airlines and has had limited access to information concerning the airline. Additional information is available at www.HawaiianAir.com.