I will check back later, If I can get the whole article, I will surely post the link....
here we go..... enjoy!!
employees of Aloha Airlines Inc. have objected to a bid to sell the bankrupt airline's intellectual property to Yucaipa Corporate Initiatives Fund so that it can be licensed to one-time rival Mesa Air Group Inc.
In a motion filed Friday in the U.S. Bankruptcy Court for the District of Hawaii, the Association of Flight Attendants objected to the sale, saying the transaction shouldn't be completed given Mesa's past bad faith conduct.
Approval should be contingent on the provision of additional compensatory benefits — such as a fund to compensate for lost medical benefits — to the “victims of Mesa's conduct,” according to the motion.
“Mesa, which drove Aloha out of business and ended the careers of thousands of long-time employees, will fly as Aloha using the good will generated by those employees' years of service,” the motion said.
“In light of the substantial evidence that Mesa's bad faith conduct caused the liquidation of Aloha and the subsequent total loss of jobs and benefits for Aloha's employees, this transaction should be disallowed,” it added.
In January 2007, Aloha filed a lawsuit accusing Mesa of using Aloha’s confidential information — such as financial plans, internal forecasts and customer lists — to compete in the Hawaii market. Aloha said Mesa acquired the information after advising Aloha that it was interested in investing in the airline.
A Mesa subsidiary, Go, sold its interisland tickets below cost with the intent to drive Aloha out of business, according to Aloha. The competitor began service to the Hawaiian Islands in June 2006.
Months after Aloha Airlines filed for bankruptcy protection, a judge said Yucaipa could buy the potential recovery in the lawsuit for more than $10 million. Yucaipa subsequently won an auction held by the bankruptcy trustee to buy Aloha's name for $750,000, court documents said.
Yucaipa and Mesa then entered into a $2 million settlement agreement, the motion said.
Mesa also agreed to pay Yucaipa a revenue payment of 1 percent of passenger ticket revenue from all Hawaiian interisland operations, subject to a minimum annual revenue payment of $600,000. Mesa will pay Yucaipa 30 percent of the pretax operating profits from Mesa's operations in the market less than the revenue payments.
“In contrast to the millions of dollars that Yucaipa will receive, and the $750,000 that the estate will receive, Mesa agreed to issue former Aloha employees six space-available free round-trip passes per year,” the suit said.
The flight attendants' motion is asking that Yucaipa require additional benefits to compensate former Aloha employees, “whose years of hard work made the Aloha name the valuable asset it is today.”
Specifically, they are asking that some money from the deal be used to create and fund a voluntary employees' beneficiary association. Money from the fund would be used to offset the uncovered medical costs being incurred by former employees who lost health insurance through Aloha's bankruptcy filing.
In a separate filing, eight sets of letters signed by former employees of Aloha Airlines and members of the Hawaii community objecting to the sale were given to the court.
A hearing on the matter is scheduled for March 3.
Though Aloha filed a Chapter 11 petition March 20 with seeming interest in reorganizing its passenger division, it shuttered passenger flights March 31, and a month later the case was converted to a Chapter 7 liquidation.
The airline attendants association is represented in this matter by Ogawa Lau Nakamura & Jew and Guerrieri Edmond Clayman & Bartos PC.
The Chapter 7 trustee is represented by Wagner Choi and Verbrugge and Sheppard Mullin Richter & Hamilton LLP.
Aloha is represented in this matter by Berger Singerman PA, David C. Farmer Attorney at Law LLLC and Squire Sanders & Dempsey LLP. The law firm Char Sakamoto Ishii Lum & Ching was brought on as special counsel.
The case is In re: Aloha Airlines Inc., case number 08-00337, in the U.S. Bankruptcy Court
04-03-2010
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