HONOLULU (AP) -- A judge on Thursday approved a reorganization plan for Hawaiian Airlines Inc., clearing the way for the carrier to emerge from bankruptcy as early as next month.
Hawaiian, which filed for Chapter 11 two years ago, said it expects two remaining labor contracts to be ratified and a formal order court ending the bankruptcy proceedings by early April. Company trustee Joshua Gotbaum called it a ''great day for the airline.''
''For an airline that two years ago was losing money and had less than $20 million in the bank, I think it's a real success,'' Gotbaum said.
Under the approved plan, shareholders keep their shares and creditors will be repaid in full.
U.S. Bankruptcy Judge Robert Faris selected the reorganization plan submitted by Gotbaum, an unsecured creditor's committee and investment group Ranch Capital LLC, the controlling shareholder of the carrier's parent company Hawaiian Holdings Inc.
The selection came a day after the main investor in a competing plan was arrested for allegedly trying to bribe an undercover FBI agent in a fraudulent scheme to fund the plan.
Paul Boghosian, 50, of St. Louis, was charged with conspiracy to commit bankruptcy fraud and two counts of commercial bribery. Each count carries a maximum punishment of five years in prison.
He was the head of Hawaiian Investment Partners, which filed a competing joint plan with Hawaiian Reorganization Committee LLC and Hawaiian Airlines pilot Robert Konop.
''I was shocked myself,'' Konop told KITV on Thursday, adding ''without funding, there is no plan.''
All three attorneys representing the outside group's plan also withdrew from the case.
Hawaiian Airlines said with financing provided by Ranch Capital, the company will have substantial new capital for growth.
The Honolulu-based airline filed for Chapter 11 on March 21, 2003. Since then, Hawaiian has restructured its aircraft leases and negotiated new three-year labor contracts with its six union groups. All but two of the contracts, covering flight attendants and pilots, have been ratified.
When the new plan becomes effective, airline President and Chief Operating Officer Mark Dunkerley will become chief executive, the company said.
Lawrence Hershfield, Ranch Capital's managing director and CEO of Hawaiian Holdings, will chair the new board of Hawaiian Airlines.