Mesa cites new evidence, seeks new trial

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Mesa Air Group has filed a motion with federal Bankruptcy Court seeking to postpone its payment to Hawaiian Airlines of $80 million in damages, and other costs, because it intends to file a motion seeking a new trial.

The parent company of interisland airline go! said it will file a motion today that will present newly discovered evidence and demonstrate errors in Judge Robert Faris' Oct. 30 ruling that will require a new trial.

Mesa is asking to postpone making its damages payment to Hawaiian because it said it would be "unreasonable" to incur the cost to secure a bond if the court decides to award a new trial.Faris yesterday granted Mesa's motion to delay making the payment pending the conclusion of a hearing scheduled for 11 a.m. Tuesday in Bankruptcy Court. Without Faris approving the short postponement, Hawaiian would have been free to enforce the judgment against Mesa's aircraft or other critical components of its go! operation as early as tomorrow.

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Mesa Air Group , facing a deadline today to post a bond of more than $80 million to comply with a court-ordered award to Hawaiian Airlines , has filed a motion with federal Bankruptcy Court seeking to postpone that payment because it intends to file a motion seeking a new trial.

The parent company of interisland airline go! said it will file a motion today that will present newly discovered evidence and demonstrate errors in Judge Robert Faris' ruling that will require a new trial.

"We are filing the motion for a new trial based, in part, on new and important information that was not before the court," Mesa General Counsel Brian Gillman said yesterday.

Mesa initially said after Faris' Oct. 30 ruling that it was going to appeal the decision, which would have brought the case to federal District Court. That still could happen if Faris denies Mesa's motion for a new trial. But if Faris grants Mesa's motion for a new trial, the case will play out again in Bankruptcy Court at an undetermined future date.

In the meantime, Mesa is asking to postpone making its damages payment to Hawaiian because it said in its other motion -- filed late Wednesday -- that it would be "unreasonable" to incur the cost to secure a bond if the court decides to award a new trial.

Faris yesterday granted Mesa's motion to delay making the payment pending the conclusion of a hearing scheduled for 11 a.m. Tuesday in Bankruptcy Court. Without Faris approving the short postponement, Hawaiian would have been free to enforce the judgment against Mesa's aircraft or other critical components of its go! operation as early as tomorrow.

Keoni Wagner, vice president of public affairs for Hawaiian, said the evidence in the case was straightforward and said he saw no legitimate reason why Mesa shouldn't pay the $80 million in damages and Hawaiian's legal costs without delay.

"Mesa signed an agreement, they breached the agreement and misused our confidential information to gain an unfair advantage and, in doing so, damaged our company to the tune of $80 million in their first 17 months in the market," Wagner said. "We are confident the ruling will stand."

Faris' award to Hawaiian of $80 million in damages, plus interest and attorney fees, came after his findings that Mesa had used confidential information obtained as a potential investor during Hawaiian's bankruptcy to gain a competitive advantage in entering the Hawaii market. Faris also ruled that since-fired Chief Financial Officer Peter Murnane had deliberately destroyed evidence that Mesa had a duty to preserve.

William Hoke, appointed interim CFO when Murnane was put on paid administrative leave, said Mesa's net worth as of June 30 was $213.1 million and as of Nov. 7 Mesa owned approximately $200 million in cash and marketable securities.

"We've sold marketable securities to hold as cash that we can then more to surety (the company issuing the bond) in order to post a bond, if that is required," Gillman said.


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