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Trouble in paradise
01 June 2005
Hawaiian Airlines successfully exited Chapter 11 on June 2, less than two years after it filed for bankruptcy protection. But this was only with a little help from the FBI, reports Victoria Pennington.
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airline
Paul Boghosian; Hawaiian Airlines
Chapter 11
Boeing
aircraft finance
"You are under arrest," said the hedge fund manager. "You have the right to remain silent."
It was at that moment that Paul Boghosian knew that his dream of owning Hawaiian Airlines had ended. The man who he thought was a hedge fund manager was in fact an undercover FBI agent. The FBI says that it arrested Boghosian for attempting to bribe the agent $500,000 in order to get a $2.5 million loan that he could use to restructure the airline. It was the day before the Hawaiian bankruptcy court was due to review his plan.
Boghosian's arrest may have been more suited to Hollywood than Honolulu, but Hawaiian Airlines' bankruptcy proceedings would have been remarkable even without the FBI's involvement.
"Two years ago Hawaiian Airlines had lost money for a decade," says Joshua Gotbaum, the airline's bankruptcy trustee. "In that time the airline's operating margin was worse...
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