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.
It's great to see Aloha leaving bankruptcy. When I flew them last in 2001 they had a great product. I really enjoyed the flight and it made my vacation that much more enjoyable. Best of luck to everyone at Aloha