A judge on Thursday accepted a motion by Aloha Airlines to modify its reorganization plan, as well as an agreement worked out between the airline and the federal Pension Benefit Guaranty Corp.
With the rulings by U.S. Bankruptcy Court Judge Robert Faris, the airline is now expected to leave bankruptcy protection in mid-February, Aloha President David Banmiller said. The exact date hasn't been decided, he said.
Besides the official transfer of ownership, emerging from bankruptcy will also entail paying a debt of about $62 million to Goldman Sachs Credit Partners LP, Banmiller said.
Aloha's initial reorganization plan called for billionaire supermarket chain owner Ron Burkle's Yucaipa Cos. LLC and former pro football star Willie Gault and the owners of the airline, the Ching and Ing families, to recapitalize the company with a combination of $50 million in equity and up to $50 million in debt financing.
The new plan approved by Faris reworks the deal to $63 million in equity and $35 million in debt financing, Banmiller said. Yucaipa will fund an additional $10 million and some local investors will make a $2.2 million investment.
The company, which guarantees basic pension benefits, had opposed the airline's plan to terminate pensions, but a tentative agreement was worked out last month.
As stated in the initial reorganization plan, defined pension benefit plans covering pilots, mechanics and clerical workers will be terminated, Banmiller said. But under the agreement with the corporation, the defined pension benefit plan for dispatchers and schedulers represented by the Transport Workers Union will be carried forward by the new investors, he said.
Aloha Airgroup Inc. is one of Hawaii's biggest employers, with 3,600 workers. The airline filed for bankruptcy protection in December 2004.
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The airline is now expected to leave bankruptcy protection in mid-February. The exact date hasn't been decided.
A federal judge on Thursday upheld Aloha Airlines' effort to jettison its worker pension plans, rejecting an appeal by the federal pension agency that could have derailed the airline's exit from...
The Pension Benefit Guaranty Corp. has notified the U.S. Bankruptcy Court that it will appeal confirmation of Aloha's reorganization plan in court.
With a contract ratification vote expected later this week, the airline is now positioned to emerge from bankruptcy as early as Dec. 15, the carrier said.