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David C. Farmer, Successor Trustee
Bobby N. Harmon

(Formerly Mary Lou Woo vs. Harmon and James Nicholson vs. Harmon)

CV05-00030 DAE/KSC

United States District Court, District of Hawaii

Judges: David A. Ezra; Kevin S. Chang

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Judge Lloyd King is a bankruptcy judge for the District of Hawaii; judge in the Aloha Airlines, Hawaiian-Telcom, Hamakua Sugar, Sukamto Sia, Midpac Lumber Co., Worldpoint Interactive, Inc., WinStar Communications, Liberty House and Bobby Harmon bankruptcy cases.

United States Bankruptcy Court, District of Delaware
5th Floor, Wilmington, DE 19801
Tel: 302-252-2890

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U.S. Department of Justice

Executive Office for United States Trustees

Washington, D.C.
Office of Research and Planning


For Immediate Release
October 30, 2001


WASHINGTON, D.C.--The United States Trustee Program has launched an initiative to more aggressively use existing civil enforcement methods to curb abuse of the bankruptcy system, Martha Davis, Acting Director of the Executive Office for United States Trustees, announced today.

"Effective case administration is vital to ensure the American public that the bankruptcy system provides relief for honest but unfortunate debtors overcome by serious financial difficulties," Davis stated. "The Civil Enforcement Initiative emanates from the U.S. Trustee Program's long-standing commitment to enforce the Nation's bankruptcy laws and explore other meaningful strategies to bolster public confidence in the integrity and effectiveness of the bankruptcy system."

"The priorities of the initiative will require a concerted effort nationwide to use existing tools in a way that best accomplishes tangible results and improvements for case administration," Davis continued. "Many of our offices use such strategies today and we hope to build upon their experience. By focusing our resources on these priorities, we also seek to address some of the concerns that have been at the forefront of debate in recent years both before Congress and in other public venues. In the end, this is very much a community effort that will require communication and cooperation with private bankruptcy trustees and with the bankruptcy bench and bar."

These are the priorities of the Civil Enforcement Initiative:

Ensuring that Chapter 7 is not abused and that Chapter 7 debtors are held accountable.

Chapter 7 debtors who do not comply with the law will have their cases converted or dismissed, or their bankruptcy discharges denied or revoked. Enforcement measures include motions to dismiss Chapter 7 cases under 11 U.S.C. §§ 707(a) and 707(b), and complaints to bar or defer discharge under 11 U.S.C. § 727.

Protecting consumer debtors, creditors, and others who are victimized by those who mislead or misinform debtors, make false representations in connection with a bankruptcy case, or otherwise abuse the bankruptcy process.

Attorneys and bankruptcy petition preparers (non-attorneys who prepare bankruptcy documents for a fee) must engage in full disclosure, be free of conflicts of interest, and engage in ethical practices. Enforcement measures include motions for sanctions, contempt of court, and disgorgement under 11 U.S.C. § 329 for misconduct by attorneys, and complaints and motions under 11 U.S.C. § 110 for misconduct by bankruptcy petition preparers....

Fighting fraud and abuse by making criminal referrals and assisting United States Attorneys in criminal prosecutions.

The U.S. Trustee Program is a component of the Justice Department that oversees the administration of bankruptcy cases and intervenes in court to enforce the bankruptcy laws. There are 21 regions in the Program, each headed by a U.S. Trustee appointed by the Attorney General.

The Civil Enforcement Initiative took effect Oct. 1, 2001, with the start of the federal government's 2002 fiscal year. Previous U.S. Trustee Program initiatives have focused on issues such as enhancing the supervision of private trustees who administer Chapter 7 bankruptcy cases, increasing the efficiency and speed of Chapter 7 case administration....


Jane Limprecht, Public Information Officer

Executive Office for U.S. Trustees

(202) 305-7411



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June 16, 2009

$400 million offer for Hawaiian Telcom

Phone company prefers its own plan over bid
by local telecommunications firm

BY RICK DAYSOG, Advertiser Staff Writer

Local telecommunications company Sandwich Isles Communications Inc. said it wants to purchase Hawaiian Telcom Inc. for $400 million.

The offer would compete with a reorganization plan proposed earlier this month by the local phone company that had a $460 million price tag.

"The Sandwich Isles proposal represents a far superior restructuring alternative to the 'stand-alone' plan proposed," Sandwich Isles said in a filing in U.S. Bankruptcy Court on Friday.

Established in 1995, Sandwich Isles provides heavily subsidized phone lines to rural customers living on property developed by the Department of Hawaiian Home Lands. The federal government pays Sandwich Isles about $13,000 per customer for providing the service, which is 100 times higher than the average subsidy for rural telephone service on the Mainland.

"As a strategic acquirer with significant expertise in the Hawai'i telecommunications industry, the Sandwich Isles proposal would ensure a smooth transition of service to a proven local operator," the company said.

In its filing, Sandwich Isles said its offer includes $250 million in cash plus $150 million in debt issued by Hawaiian Telcom.

The company said it plans to keep Hawaiian Telcom's 1,400 workers at existing wages, with the exception of senior management.

A deal with Sandwich Isles would require the approval of the bankruptcy court, the state Public Utilities Commission and the Federal Communication Commission.

Hawaiian Telcom said it stands behind its own reorganization plan, which has the support of a key committee of its secured bank lenders, who have a big say on how the bankruptcy proceedings are handled.

"On June 3, Hawaiian Telcom filed its plan of reorganization, which will significantly reduce the company's debt by nearly $790 million, from $1.1 billion to $300 million, and position the company to emerge from bankruptcy a stronger and more financially secure company," Hawaiian Telcom said.

federal loans

Hawaiian Telcom, founded in 1883, is the state's largest phone company with more than 500,000 business and residential customers state- wide.

The company filed for bankruptcy protection Dec. 1 due to its heavy debt load and the loss of thousands of customers to wireless and other competitors.

Besides the seller financing, Sandwich Isles said its purchase will rely on low-cost, federal government loans.

Since 1998, Sandwich Isles has obtained more than $400 million in loans from the U.S. Department of Agriculture.

The company is headed by Albert Hee, the brother of state Sen. Clayton Hee, D-23rd (Kane'ohe, Kahuku).

The company's participation in the government loan program and other subsidies has recently come under the scrutiny of an influential member of Congress.

In March, U.S. Rep. Henry Waxman, D-Calif., said Agriculture Department subsidies received by Sandwich Isles and other local carriers such as Sprint Nextel and Mobi PCS amounted to about $13,000 per phone line per year.

Waxman, chairman of the House Committee on Energy and Commerce, has advocated reforms to the government's high-cost rural phone subsidy program.

rejected earlier

In its filing, Sandwich Isles said company officials met with Hawaiian Telcom's management earlier this year but were rebuffed.

Hawaiian Telcom currently is not required to consider Sandwich Isles' reorganization plan.

After filing for bankruptcy in December, the company had six months to come up with its own reorganization plan without having to consider alternative plans.

U.S. Bankruptcy Judge Lloyd King recently extended that period to June 30 and the company is seeking another extension to Sept. 30.

Sandwich Isles is opposing the latest extension request so it can present its reorganization plan earlier. A hearing is scheduled on July 1.


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NEW DISCOVERY (03/30/09): Undisclosed conflicts of interest between Attorney General Alberto Gonzales, the United States Department of Justice, Office of the U.S. Trustee, Curtis Ching, Carol Muranaka, Guido Giacometti, Susan Tius, Sukamto Sia, Bank of Honolulu, Diane Plotts, Bob Awana, Linda Lingle, Citigroup, Robert Rubin, Bill Clinton, John Waihee, Ben Cayetano, Goldman Sachs, Colbert Matsumoto, Henry Peters, Matsuo Takabuki, Richard Wong, Jeff Stone, Oswald Stender, Gerard Jervis, Lokelani Lindsey, Nathan Aipa, Colleen Wong, Louanne Kam, John Candon, Clifford Laughton, Timothy Johns, Bishop Museum, Nainoa Thompson, Mark Polivka, Judge Eden Elizabeth Hifo (fka Bambi Weil), Judge Lloyd King, Judge Robert Faris, Judge David A. Ezra, Judge Barry Kurren, Mary Lou Woo, James B. Nicholson, David C. Farmer, Steven Guttman, etc.:

August 24, 2000

Executive Centre units auctioned for $4 mil

Ownership of the properties
could change during
another round of bids

By Peter Wagner, Star-Bulletin

A Nevada investor has outbid Citibank on 32 residential and two commercial units at Executive Centre, the downtown high rise that once belonged to Indonesian investor Sukamto Sia.

But with court confirmation and another round of bids possibly ahead, ownership of the property is yet to be determined.

Clifford Laughton, president of the Reno-based Nevada Holdings Ltd. and chief executive at Honolulu-based satellite company Columbia Communications Corp., yesterday made the winning bid of $4,000,100.

Laughton's bid topped a $4 million offer by Citibank N.A., the only other bidder at a foreclosure auction at the state courthouse yesterday.

The leasehold properties include 31 residential units, a penthouse, two commercial spaces occupied by Sprint Hawaii and Fujikami Florist and 65 parking stalls.

The heavily mortgaged 41-story building, at 1088 Bishop Street also includes a 120-room Aston hotel, retail outlets including Long's Drugs and Ross Dress For Less and nearly 300 residential units.

The entire property was appraised last year at $39.5 million.

Citibank, the major creditor in a foreclosure action against one of Sia's company's, MKS Executive Partners, took possession last month of most of the 41-story building in a complex bankruptcy deal in which Sia's estate will receive about $500,000.

Citibank affiliate EXCT L.P. took ownership of about 400 units on July 28.

Sia, currently in Chapter 7 bankruptcy liquidation, originally filed for Chapter 11 bankruptcy reorganization in November 1998.

While Citibank yesterday allowed itself to be outbid by $100, the sale is far from over. Under rules of the foreclosure, new bids may be entertained at confirmation but must be at least 5 percent above the auction price.

Foreclosure commissioner John Candon said at least three parties who were silent during yesterday's auction have asked when the confirmation hearing would be. No date has been set.

Laughton yesterday said he would likely honor existing leases at Executive Centre if he remains the high bidder. He said the units are a good investment because of depressed property values and a strong rental market in the downtown area.

While Executive Centre was once a key holding of Sia in Honolulu, the bankruptcy trustee was unable to liquidate the property for creditors because Sia held no equity in it.

His ownership in the building was through MKS Executive Partners, one of his numerous companies.

The 40-year-old businessman owes nearly $300 million to casinos, banks and creditors around the world.


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NEW DISCOVERY (11-24-08): New Exhibit: “EQ 2048 - Deposition of Lokelani Lindsey taken on November 4 & 9, 1999". This document provides clear evidence that J. Douglas Ing had multiple conflicts-of-interest in this case and, since he was not a named Defendant in my RICO lawsuit against the former Trustees, he was not a legitimate signatory to the Settlement Agreement: Furthermore, since the Settlement Agreement was NOT SIGNED by any of the five Trustees actually named as Defendants, the Settlement Agreement was not legal or valid. (See Exhibit A)



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June 13, 2008

No $600,000 bonus for Aloha's ex-CEO

Judge rejects request, saying airline's
collapse doesn't merit windfall

BY RICK DAYSOG, Advertiser Staff Writer

U.S. Bankruptcy Judge Lloyd King yesterday rejected a bonus request of up to $600,000 for former Aloha Airlines CEO David Banmiller, saying Banmiller should not "make a windfall off a collapse of the company."

Aloha, the state's No. 2 carrier, shut down its passenger service on March 31 and laid off 1,900 workers with little prior warning.

When an attorney argued it would be fair to pay a bonus to Banmiller and former Aloha Chief Financial Officer Jeffrey Kessler as they work to sell parts of the company, King said:

"I don't think fairness is an appropriate thing to discuss unless you want to talk about fairness to people who lost their jobs on virtually no notice (and) the hardship that has been imposed upon thousands of people. Now we have the top insiders potentially making a big score on this case. I think that's a very ugly aspect of this motion.

"It simply looks bad when the people who are with the company can make more money when it's going out of business than when it is a going concern."

Last month, the airline's court-appointed bankruptcy trustee, Dane Field, proposed paying Banmiller and Kessler incentives for helping sell off the carrier's assets. Under the plan, the two would get $50,000 each if the sale of Aloha's air cargo operations, contract services division and other assets fetches $19.25 million or more.

The two could receive as much as $600,000 each if the sale of Aloha's remaining assets fetches more than $26.5 million.

Those payments would be made by Aloha's chief lender GMAC Commercial Finance LLC from the proceeds of the asset sales.

The bonuses are on top of the $500 an hour that Banmiller and Kessler are now being paid to help the airline sell off its assets. The hourly pay is capped at $25,000 a month.

Prior to the bankruptcy, Banmiller received $500,000 a year in base salary as Aloha's CEO. When hired as Aloha's CFO in 2005, Kessler and his Atlanta-based firm Tatum CFO Partners received $3,000 a week, or $156,000 a year.

When reached by phone yesterday, Banmiller and Kessler declined to comment.

Others fared poorly

During yesterday's hearing, King questioned why Banmiller and Kessler should receive a bonus when they were already being paid $500 an hour. He also asked why other airline industry consultants couldn't have been hired to do the same work.

"Should Mr. Banmiller and Mr. Kessler be singled out for such favorable treatment in a Chapter 7 (bankruptcy) case where the other employees of the company have come out so poorly?" King said.

Jim Wagner, attorney for Field, said his client played an important role in selling Aloha's cargo and contract services units, which saved more than 1,400 jobs and preserved a business that handles more than 85 percent of all air freight between O'ahu and the Neighbor Islands.

'working very hard'

Aloha Cargo was sold to Seattle-based Saltchuk Resources Inc. for $10.5 million and the contract services unit was sold to Los Angeles-based Pacific Air Cargo for $2.05 million.

"I think Mr. Banmiller or Mr. Kessler have been working very hard in good faith toward liquidating the estate's assets," Wagner said.

Douglas Lipke, an attorney for GMAC Commercial Finance LLC, said Banmiller's and Kessler's institutional memory are invaluable. They have extensive contacts in the airline industry and have the best handle on the value of assets, such as the company's receivables, Lipke said.

Former Aloha pilot John Riddel said the judge did the right thing in rejecting the bonus plan. Riddel said that many of the pilots who continued to fly Aloha's cargo planes after March 31 have not yet received their full pay.

Some are still owed about half their pay, Riddel said.

"We were improperly underpaid," he said.

The Honolulu Advertiser

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New Discovery - 04/18/08:

April 3, 2008

Most creditors of Aloha likely to receive ‘squat’

The sale of assets and a pending lawsuit will generate
funds, but the airline owes too much

By Dave Segal, Star-Bulletin

Aloha Airlines' unsecured creditors, who received one-hundredth of a cent on the dollar after the company's last bankruptcy three years ago, likely will receive nothing this time around.

The unsecured creditors include all those who paid for Aloha tickets using cash or checks -- people whom Aloha's Web site advises to file claims with the U.S. Bankruptcy Court.

"Between you and me, the unsecureds are not going to get squat," said one insider close to the case.

All the money that Aloha receives from the sales of its cargo division, aviation services unit and the company's intellectual property, such as the Aloha name and logo, will go first to its primary lender, General Motors Acceptance Corp., and then -- if anything is left over -- to its majority investor, Yucaipa Cos. LLC.

Aloha owes GMAC $44 million of principal, plus an additional $4.9 million for letters of credit that the lender issued on behalf of Aloha, while Yucaipa is owed $106.7 million.

Aloha reported in its March 20 bankruptcy filing that it has in excess of 4,000 creditors. On Monday the 61-year-old airline shut down its passenger operations.

"We have major concerns that this is essentially being operated for the benefit of the secured lenders rather than for the creditors and the people of Hawaii," said attorney Christopher Prince, who represents the unsecured creditors committee.

Under federal Bankruptcy Law, secured creditors -- those with collateral -- get paid first from the proceeds of any sales. Administrative claims, such as attorney fees, are paid next, while unsecured claims are last in the pecking order.

In a case where there is little money available, attorneys can get paid through "carve-outs" in which the secured creditors set aside money to pay the attorneys and other professionals for the debtor -- in this case, Aloha -- and the unsecured creditors committee.

The one wild card for creditors is Aloha's lawsuit against Mesa Air Group, which is scheduled to be heard in federal District Court in October. Aloha is alleging that Mesa used predatory pricing and confidential information obtained as a potential investor during Aloha's bankruptcy to gain a competitive advantage in entering the Hawaii market.

A federal Bankruptcy Court judge already has awarded Hawaiian Airlines more than $80 million in a separate lawsuit with some of the same allegations. Aloha President and Chief Executive David Banmiller thinks the damages award could be even higher if Aloha prevails in its suit.

Banmiller said the shutdown of Aloha's passenger operations increases the amount of damages it could seek from Mesa in the lawsuit.

But the next turning point for Aloha's creditors comes today, at a court hearing over the potential sale of the cargo unit.

Cargo, the airline's most profitable division, flies 85 percent of the state's goods as well as all the U.S. mail to Maui and the Big Island. The unit has generated earnings before interest, taxes, depreciation and amortization of more than $6 million annually in recent years.

A dispute over pilot seniority and the company's fears of a walkout that could scuttle the cargo unit's sale prompted Aloha to file a motion Tuesday in Bankruptcy Court seeking a temporary restraining order against the Air Line Pilots Association. Bankruptcy Judge Lloyd King put off making a decision on the motion to give the sides time to talk. A status conference on those talks is scheduled for today.

Prince said he is concerned that there is a "rush to judgment to sell these assets piecemeal and deny the state of Hawaii the business that it's enjoyed for the last 61 years."

But Banmiller said there was no rush to sell the cargo unit at all.

"I've been trying for at least a year to sell Aloha Airlines -- the entire entity -- because I think it has great value," Banmiller said. "The problem is, the realities that are out there today are frankly different. Fuel has dramatically increased the bet on trans-Pac and interisland because most of the fuel goes to that. So when you talk about a doubling of fuel, it really affects interisland and trans-Pac and not cargo, because the cargo cost fuel surcharge is passed on. Contract services just handle other carriers, so the economics is different for those two.

"Go! trashed the environment interisland, but not cargo. Fuel did the same for trans-Pac and interisland. So we woke up one day and everybody is saying, 'I'd like to buy this but not the entire entity.' So as a responsible debtor, I have to listen to the marketplace, and we have a lot of interest in cargo."

Also on the docket today is a motion by Aloha to reject 14 of its 27 aircraft leases. The remaining aircraft are either cargo planes or aircraft already owned by Aloha.


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NEW DISCOVERY (04-11-08): Trustee James B. Nicholson failed to disclose that he was the court-appointed bankruptcy trustee for Defendant’s witness, Peter Savio, even though he was asked specifically if he had any business, professional, personal or political relationships with Mr. Savio:

August, 2003

Hawaii’s Top 250 Companies:

New To The List: Whoa, Savio!

Hawaiian Island Homes' debut is marked by acrimony

By Kelli Abe Trifonovitch, Hawaii Business Magazine

Any interview that focuses on Peter Savio's new company, Hawaiian Island Homes Ltd., will soon focus on another Top 250 company, Central Pacific Bank. Says Savio: "They're malicious. They're vicious. I am going to become a stockholder in Central Pacific Bank. I am going to reform that institution. Their mistake was they stomped me. They didn't kill me. I'm coming back. I'm going to have fun with them."

Go back to the year 2001. Savio Inc., a holding company for eight real estate sales and development companies, was No. 56 on the Top 250, with $134.6 million in 2000 gross sales. But in 2001, Savio Inc. filed for Chapter 7 liquidation, and Peter Savio and his wife filed for personal bankruptcy protection. Savio says he was forced into the bankruptcies because CPB gave him just five days to move from his second-floor offices at 931 University Ave. Savio says he had been in a workout plan with a number of lenders after he started experiencing cash-flow problems in the mid-1990s. But CPB forced his hand.

"The only way to stop them was, I had to file for personal bankruptcy. So to save my employees and everything else, I filed for personal bankruptcy - one of the most difficult decisions I've ever had to make. But I was really pissed at Central Pacific Bank for doing that," he says.

"It was tough," he adds. "Basically I lost everything. Lost my house. Lost everything. Had to basically come back from nothing."

Today, Savio is more than back. His real estate company, Hawaiian Island Homes Ltd., lists 2002 gross sales of $177 million. Its office is downstairs in the same building that Savio Inc.'s once was. And the company is No. 27, ahead of CPB Inc. (No. 49), something Savio will rejoice to read. Savio says, "I've decided that my goal is to beat them in the Top 250. … just so we can say, 'Nannynannybooboo!'"

That's not all. "My short-term and my long-term goal is to reform Central Pacific Bank," Savio says. "I think I'm going to buy the bank."

Ann Takiguchi, Central Pacific Financial's communications officer, says, "We made every effort to work with Mr. Savio, and it is unfortunate that he is blaming us for his situation. Out of respect for our customers' privacy, we have no further comment. As a matter of bank policy, we don't comment on the affairs of our customers."

Bankruptcy court filings show that Central Pacific Bank claimed that Savio Inc. owed it about $1.5 million when Savio filed for bankruptcy in 2001. The Internal Revenue Service and Pitney Bowes Credit Corp. also listed claims of about $2,000 each.

The court-appointed trustee for Savio Inc.'s bankruptcy case, attorney Jim Nicholson, says the only unencumbered asset of the estate, a unit in the Diamond Head Beach apartment building, was sold for $375,000 in June 2003.

Gross sales for Savio's other new company, Hawaiian Island Development, were not reported for this year's Top 250, so one thing is for sure: Next year, he'll be back. Says Savio: "We're going to set up a new holding company called, 'I Hate CPB.' No, my attorney said I couldn't do that. I have a warped sense of humor, OK? But anyway, the new holding company is going to be Ohia Holdings."

Knowing Savio, there is marked symbolism in that choice. After all, the Ohia tree can be found growing in the middle of old lava flows.

Hawaii Business, August, 2003

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March 30, 2008

Aloha Airlines shutting down;

Monday last day of operations

Advertiser Staff

Aloha Airlines announced today that it will be shutting its inter-island and trans-Pacific passenger flight operations. Aloha's last day of operations will be Monday.

On that day Aloha will operate its schedule with the exception of flights from Hawaii to the West Coast and flights from Orange County to Reno and Sacramento and Oakland to Las Vegas.

Effective immediately, Aloha will stop selling tickets for travel beyond tomorrow.

The shutdown will affect about 1,800 employees.

"This is an incredibly dark day for Hawaii," said David Benmiller [sic], Aloha's president and chief executive officer.

"Despite the groundswell of support from the community and our elected officials, we simply ran out of time to find a qualified buyer or secure continued financing for our passenger business. We had no choice but to take this action."


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July 22, 2005

Aloha Airlines chief to earn $497,400

By Rick Daysog, Advertiser Staff Writer

Aloha Airlines Inc. CEO David Banmiller will earn about $500,000 this year and could receive up to $1 million in severance should the airline emerge from bankruptcy under new ownership, according to documents filed in U.S. Bankruptcy Court.

Banmiller will receive an annual base salary of $455,400 plus annual housing expenses of at least $42,000, the airline said in documents filed Wednesday.

Aloha's filing — which provides the first public glimpse into the pay of the airline's top executive — revealed that Banmiller owns 5 percent of the privately held airline and could receive more than $1 million in severance pay over two years should Aloha emerge from bankruptcy under new investors. As a privately held company, Aloha has not been required to report such information in public filings with the Securities and Exchange Commission.

Aloha also said Banmiller could seek a success fee when the company completes its reorganization. A success fee, the details of which are yet to be determined, would be subject to the bankruptcy court's review.

Banmiller's compensation package was contained in a filing seeking bankruptcy court approval for his employment contract. The airline negotiated Banmiller's contract in October but needs court approval to assume his contract.

Bankruptcy Judge Robert Faris has scheduled a hearing Tuesday on Banmiller's contract.

Aloha said Banmiller's compensation was reasonable, given his experience in the airline business and his expertise in restructuring distressed companies.

Banmiller, who was named Aloha's chief executive officer in November, has more than three decades of experience in the airline industry. He previously served as president and CEO of Sun Country Airlines and Pan American World Airways. He also was president and chief operating officer of Air Cal before the company was acquired by American Airlines.

Aloha said Banmiller and other top executives have seen their pay reduced by 20 percent since the bankruptcy and added that its chief executive likely would lose his post should the company emerge from bankruptcy under new investors.

"Mr. Banmiller's contract is reasonable for an executive of his caliber," said Stephanie Ackerman, Aloha's senior vice president for public relations and government affairs.

In its filing, Aloha said Banmiller's annual compensation is well below that of his peers on the Mainland, including the chief executives of United Airlines and American Airlines who each received more than $1 million last year.

The airline also compared Banmiller's pay with that of his predecessor, Glenn Zander, who was paid $500,000 a year in salary and housing allowance, and former Hawaiian Airlines bankruptcy trustee Joshua Gotbaum, who received $720,000 in annual salary, housing and living expenses.

Gotbaum's pay figures did not include a success fee, which he is entitled to seek for steering Hawaiian out of bankruptcy. He has not yet applied for the fee but has until next month to do so.

Hawaiian, which emerged from bankruptcy protection in June, had no immediate comment on Aloha's filing.

Aloha, the state's second largest airline with more than 3,600 employees, filed for bankruptcy protection in December. The company is searching for new investors that will help it get out of bankruptcy.

Banmiller's pay, along with the compensation of other top executives, has been a sore point for the airline's unionized workers, who say they have made significant concessions during the past year.

Daniel Katz, attorney for the Air Line Pilots Association, said he plans to file an objection to Banmiller's contract later today. The pilots, who have given up more than $20 million in concessions, previously criticized the executive packages as extravagant.

"We object to these benefits for executives while the rank and file are getting cuts in pay," Katz said.

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NEW DISCOVERY (03-21-08):

March 21, 2008

Aloha Airlines in talks to sell all or parts of company

Rick Daysog, Advertiser Staff Writer

Aloha Airlines today said it is in discussions with several parties to sell the entire airline or parts of it.

Aloha, the state's second-largest carrier, filed for Chapter 11 bankruptcy protection yesterday with assets and liabilities both in excess of $100 million. Aloha also blamed unfair competition by low-cost carrier go!.

In a hearing in U.S. Bankruptcy Court this morning, Aloha said it was down to $3.5 million in cash and that its expenses over the next 10 days would eat away about $2.3 million of that.

Aloha said its main investor, Yucaipa Co., had plowed more than $110 million in the airlines since it emerged from bankruptcy in February 2006. Yucaipa said it is unwilling to provide further financing.

During the hearing, U.S. Bankruptcy Judge Lloyd King granted Aloha permission to pay some of its daily operating costs, such as utility bills and wages. King will hold further hearings this afternoon on Aloha's agreement with lenders to secure more financing.

Reach Rick Daysog at rdaysog@honoluluadvertiser.com.

The Honolulu Advertiser

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NEW DISCOVERY (03/18/08) - David Farmer is the Trustee for Mid-Pac Lumber Company; with original bankruptcy judge being Judge Lloyd King; with current judge being Robert Faris; and with major creditor being lessor, Kamehameha Schools/Bishop Estate:









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NEW DISCOVERY (03/10/08):

March 10, 2008

Replacing top judge is Lingle’s jurisdiction

Gov. Lingle will pick the next chief justice unless
the people alter the Constitution

By Ken Kobayashi, Star-Bulletin

Gov. Linda Lingle says she wants the next chief justice of the Hawaii Supreme Court to be a hard-working legal scholar who will not legislate from the bench.

Candidates would not be favored if they were prosecutors, "but it wouldn't hurt their chances, either," the Republican governor said in a recent interview with the Star-Bulletin.

Although Attorney General Mark Bennett has been mentioned in legal circles as a top contender, the governor said it is too early to mention any names.

But in explaining the qualities she would like to see in judges, Lingle made clear that she believes they should interpret laws and leave legislation to elected officials.

Her remarks suggest that her appointment of the state's next chief justice could be monumental for the five-member high court. Known for a long tradition of rendering "activist" decisions, the court has been hailed by civil rights advocates but criticized by others as going beyond reviewing and applying the laws.

Lingle's appointment would be the first time that a Republican governor would name a chief justice in more than 40 years. Democratic Gov. John Burns appointed William Richardson in 1966, and Democratic governors appointed the next two: Herman Lum and the current chief justice, Ronald Moon.

The only way Lingle would be prevented from making the appointment is if state lawmakers place on this fall's ballot -- and voters approve -- a proposed constitutional amendment to lift the mandatory retirement for judges who turn 70.

Unless the state Constitution is amended, Moon must retire when he turns 70 on Sept. 4, 2010, about three months before Lingle's term expires.

The state Senate approved a controversial measure last week that raises the mandatory retirement age to 80, and sent the proposal to the state House. But key senators acknowledge that it will be difficult for the amendment to pass because voters rejected a similar proposal in 2006 that eliminated the mandatory retirement provision. Voters rejected the amendment by 80,000 votes, 58 percent to 35 percent.

"It's an uphill battle," said Sen. Brian Taniguchi, Senate judiciary chairman. "I'm not going to die if the bill dies."

Senate President Colleen Hanabusa agreed with the prognosis. "I'm not sure it will make it out of the Legislature because we just put it on the ballot," she said.

Taniguchi maintained that he views the proposal as a civil rights issue against age discrimination and a "compromise" by retaining the retirement age but raising it to 80.

Opponents, including Lingle, contend the measure is aimed at preventing her from naming the next chief justice.

Bennett and City Prosecutor Peter Carlisle, who opposed the 2006 proposal, submitted testimony in opposition to the current measure before Taniguchi's committee last month.

The proposal's supporters include the Hawaii Government Employees Association and the Japanese American Citizens League.

Republican Sen. Fred Hemmings, who voted against the measure last week, said in an interview that the proposal was "petty politics at its worst."

"I think they (Democrats) will try to do whatever they can to put it on the ballot," he said.

Taniguchi said he believes Moon is doing an "all-right job," but said the motivation behind the measure is not to keep him as chief justice. The senator noted that Moon was a Republican before he got to the bench.


The speculation that Bennett will be Lingle's choice has been fueled by his role as a trusted adviser to the governor. In addition, his was one of three names Lingle submitted to the White House for a lifetime tenure as a U.S. district judge here. In 2005, President Bush chose Michael Seabright, now a federal judge, from the list.

The speculation prompted Taniguchi to ask Bennett at last month's hearing about the chief justice's job.

In an interview, Bennett gave the same answer he gave to the senator: If the job somehow opened up now, he would not apply for it.

"My plans right now are, when I'm done as attorney general, to return to private practice and/or teach," he said. "But I would not even begin to speculate about what my feelings might be in two years."

Lingle's appointment would be subject to Senate approval. The Democratic-dominated Senate has rejected some of her appointments, including Ted Hong to the Circuit Court and Randal Lee to the Intermediate Court of Appeals.

But if Lingle gets the names for Moon's replacement early in 2010 and her appointment is rejected, she would be able to name another person from a list of four to six names submitted by the Judicial Selection Commission.

If the Senate rejects all of her choices, the commission would chose the chief justice from its list, according to the state Constitution. The commission's selection would not be subject to Senate approval.

Hanabusa said "it's almost positive" that Bennett will be appointed by the governor. She said one of the criticisms is that he is sometimes almost "overzealous" in representing the administration over the legislative and judicial branches. Hanabusa cited his efforts against the mandatory retirement amendment that was placed before the voters by the Legislature in 2006.

"I think people are watching because they have concerns," she said.

Hemmings, however, said he is a "big fan" of Bennett and applauded him for his work with prosecutors and police in pushing for legislation. "It's hard to deny his success and record," Hemmings said.

Another name mentioned is Mark Recktenwald, a former assistant U.S. attorney who was Lingle's director of the Department of Commerce and Consumer Affairs before the governor named him chief judge of the Intermediate Court of Appeals last year.

Hanabusa said Recktenwald is considered a good administrator and would have support, but indicated senators might wait to see how he does as the chief appeals court judge.

Recktenwald said he has been chief judge for only about 10 months and is focused on doing a good job. "I haven't given consideration to anything else," he said.


Lingle's appointment would oversee a Hawaii Supreme Court whose history includes expanding the public's rights to beaches and surface waters; recognizing the rights of native Hawaiians go onto private property for traditional religious and food gathering practices; and striking down laws the court believed infringed on the rights of criminal defendants.

In its landmark and highly controversial case, the high court issued a 1993 decision that paved the way for same-sex marriages in Hawaii. That ruling prompted state lawmakers to complain that the court was creating new law, and it led to a constitutional amendment that essentially negated the ruling.

"I continue to try to reflect what the public would like to see in a judiciary, and that is a judiciary that really interprets the laws that elected people pass rather than try to make law as a judge from the bench," Lingle said.

Lingle notes that unlike the three previous Democratic governors, she is not a lawyer who might be familiar with judicial candidates. She suggests that helps bring a fresh prospective to her judicial appointments.

Because her appointments are for 10-year terms, the judges Lingle has selected -- and will select -- will remain on the bench for years after she leaves office.

Lingle said she wants her legacy to be that the courts will be a place where people "get a fair shake."

"I think the very highest achievement you can have for a judiciary is that the average citizen of a state or of a country will get fair treatment no matter who they are," she said.


~ ~ ~

Judicial Selection Commission

The Judicial Selection Commission reviews and evaluates applications for all judicial vacancies, and vote, by secret ballot, to select qualified nominees. Established by a 1978 state constitutional amendment, the Commission is governed by the Judicial Selection Commission Rules.

The names of the nominees are then forwarded to the appropriate appointing authority. The governor is the appointing authority to nominate judges of the Supreme Court, Intermediate Court of Appeals, and Circuit Court for an initial ten-year term. The governor selects appointees from a list of not less than four and not more than six names submitted by the Judicial Selection Commission. The commission submits a list of at least six names to the chief justice who nominates judges for district and district family court to six-year terms. All nominations are subject to confirmation by the state senate.

The Commission also determines whether a justice or judge shall be retained in office. The Commission publicizes the fact that a justice or judge is seeking retention so that all persons who might have an interest in the matter be informed of the opportunity to comment.

Comments about justices and judges seeking appointment or retention should be submitted to:

Contact Information:
Judicial Selection Commission
417 South King Street
Honolulu, Hawai`i 96813-2902
Telephone: (808) 538-5200

The Commission is composed of nine members, no more than four of whom may be lawyers. The members, who serve staggered six-year terms, are selected or elected as follows:




Rosemary T. Fazio



Philip Hellreich



Shelton G.W. Jim On








Appointing/Electing Authority

Susan Ichinose

04/02/07 - 04/01/13


Frederick Okumura

04/02/07 - 04/01/13


Melvin I.Chiba

04/02/02 - 04/01/08


Rosemary T. Fazio

04/02/03 - 04/01/09


Thomas Fujikawa

04/02/03 - 04/01/09


Philip Hellreich

04/02/03 - 04/01/09


Shelton G.W. Jim On

04/02/05 - 04/01/11


Ralph R. LaFountaine

04/02/05 - 04/01/11


Sheri N. Sakamoto

04/02/05 - 04/01/11


Frederick T. Okumura

04/02/07 - 04/01/13


~ ~ ~


The Judicial Accountability Initiative Law, J.A.I.L., is a single-issue national grassroots organization designed to end the rampant and pervasive judicial corruption in the legal system of the United States. J.A.I.L. recognizes this can be achieved only through making the Judicial Branch of government answerable and accountable to an entity other than itself. At this time it isn't, resulting in the judiciary's arbitrary abuse of the doctrine of judicial immunity, leaving the People without recourse when their inherent rights are violated by judges.

~ ~ ~

"Power tends to corrupt, and absolute power corrupts absolutely. Great men are almost always bad men."

~ Lord Acton, in a letter to Bishop Mandell Creighton, 1887.

~ ~ ~


~ ~ ~



~ ~ ~

NEW DISCOVERY (02-09-08): Kamehameha Schools made a “confidential” settlement agreement with the plaintiff in the John Doe vs. Kamehameha Schools case, which my former attorney, John Goemans, Esq., says, according to what he has learned from the IRS, violates the rules for a non-profit charitable trust:

February 9, 2008



An attorney involved in a challenge to Kamehameha Schools'

Hawaiians-only policy reveals the amount of a settlement

By Ken Kobayashi, Honolulu Star-Bulletin

Kamehameha Schools made the first move to settle a legal challenge to their admissions policy giving preference to native Hawaiians and later agreed to pay $7 million, a lawyer involved in the case said yesterday.

John Goemans, an attorney for an unnamed non-native Hawaiian student who filed a lawsuit contesting the policy, said the charitable trust offered for the first time to talk about an out-of-court settlement last May, just days before the U.S. Supreme Court was to decide whether to hear the case.

Goemans, a former Big Island attorney recuperating in Florida from heart surgery, and Sacramento, Calif., lawyer Eric Grant, the lead attorney, represented the unnamed student and his mother.

"They (the schools) approached Eric and said we wanted to settle and we have to settle by Friday morning," when it was believed the high court was to make a decision about accepting the case, Goemans said.

He said it appeared the high court would accept their appeal of an 8-7 decision by the 9th U.S. Circuit Court of Appeals that upheld the policy.

"They (the schools) were worried about losing in the Supreme Court," Goemans said.

Goemans said he did not know how Grant and the Kamehameha Schools arrived at the $7 million figure.

The hotly disputed federal civil rights lawsuit caused a firestorm of controversy among Kamehameha Schools supporters who believed the challenge struck at the more than century-old admissions policy and the heart of the charitable trust's mission to educate children of Hawaiian ancestry.

The confidential settlement was announced on May 14. Those connected with the case repeatedly refused to disclose the terms.

Goemans said he was disclosing the amount because he said he recently learned from Internal Revenue Service officials that Kamehameha Schools, a tax-exempt charitable trust, cannot keep the figure confidential.

"Because exempt organizations operate in the public good, you got to report all your expenses with particularity, and you cannot keep information relative to those expenses confidential," he said. "It's in the public interest to have full disclosure."

Ann Botticelli, Kamehameha Schools spokeswoman, said yesterday the settlement contained a confidentiality clause.

"We intend to honor the terms, and we will not be discussing the settlement or John Goemans' assertions," she said.

Grant said yesterday he had no comment.

Kamehameha Schools, a multibillion-dollar charitable trust and the state's largest private landowner, was established under the 1883 will of Princess Bernice Pauahi Bishop. It educates more than 6,700 students at its flagship campus at Kapalama Heights, two other campuses on Maui and the Big Island, and 31 preschools throughout the state.

Senior U.S. District Judge Alan Kay upheld the school's Hawaiians-first policy, but a panel of the appeals court in San Francisco ruled 2-1 that the practice violated federal civil rights laws. That decision triggered statewide protests and marches by school supporters.

Later, a larger appeals court panel voted 8-7 to uphold the policy.

It was an appeal by Grant of that 8-7 ruling that was on the doorsteps of the U.S. Supreme Court when the settlement was announced.

At the time, school officials indicated that the settlement calling for the dismissal of the lawsuit leaves intact the appeals court's 8-7 decision upholding the admissions policy.

But the dismissal does not guarantee that another lawsuit might surface and make its way to the high court, although it would first have to go through the federal trial and appeals courts, where the 8-7 ruling would be considered to be binding on the issue. But even if those who file the new lawsuit lose on those two levels, they could still ask the high court to review the case.

Honolulu attorney David Rosen said he has plaintiffs for a lawsuit to challenge the admissions policy. He said the settlement does not affect his case. Rosen said he expects the suit will be filed this year.

Goemans said Grant received 40 percent, or $2.8 million of the $7 million. Goemans said he is preparing to file his own lawsuit seeking to recover a "reasonable percentage" of the $7 million for his work in the case.

Goemans said he found the unnamed student and arranged for Grant to be the attorney for the student and his mother.

"I put the whole thing together," Goemans said. "But for me there would not have been a $7 million payment."

The student never was admitted to Kamehameha Schools because his case was pending. He has since graduated from high school and had been attending college, Grant said last year.


~ ~ ~

February 9, 2008

Amount of settlement raises critical concern

By Robert Shikina, rshikina@starbulletin.com

Supporters and critics expressed surprise yesterday at the $7 million Kamehameha Schools paid a student to settle a lawsuit disputing its Hawaiians-first admission policy.

One Kamehameha Schools alumnus says disclosure of the settlement with the anonymous, non-Hawaiian student will prompt questions among Hawaiians.

"I'm not happy with $7 million," said Kamehameha Schools alumnus Jan E. Hanohano Dill. "Unfortunately, that's a lot of money, and it's going to create a lot of questions in the Hawaiian community whether it was right or wrong and to continue."

Dill, also a board member of Na Pua a Ke Ali'i Pauahi, a nonprofit group whose members include students, parents, and alumni of Kamehameha Schools, said he continues to support the school's decision.

"I don't know the details, and I think that's something that has to be cleared," he said. "You settle because you want to avoid costs that would be incurred as you go forward."

He added, "I have to believe that they understood that this was something good for the Hawaiian people. ... It will be clear as things unfold whether that was true."

Dill, who is also president of the nonprofit Partners in Development Foundation, said the admissions policy must eventually be addressed and that the settlement avoids this case but does not stop other cases.

Marion Joy, former vice president of Na Pua, called the settlement a "misuse of trust funds."

"The trust is continually going to be challenged," she said. "This is not going to be the last. ... As far as settling for the particular lawsuit, it's not in the best interests of the beneficiaries (of the 1883 will of Princess Bernice Pauahi Bishop)."

Kamehameha Schools declined comment.

Honolulu attorney David Rosen, who has sought potential clients to sue Kamehameha over its admissions policy after the settlement, sent out a statement yesterday that said the $7 million settlement was used to "buy off this case."

He added that the trustees should open a campus on the Leeward Coast of Oahu and possibly Molokai where increased educational opportunities are needed.

H. William Burgess, a retired attorney and founder of Aloha for All, a group opposed to Hawaiian sovereignty, said the settlement raises questions about the proper use of the trust funds.

"Normally, trustees, if they're doubtful about doing something, they ask the court to give them instructions," he said. "Yet in this case, the biggest charitable trust, probably in the nation, instead of welcoming the opportunity to get the highest court in the land to settle it, they pay $7 million to leave it open. And it is very much open."


* * *

Judge Lloyd King is expected to testify as to why he approved the Bankruptcy Settlement in the Harmon case when the Settlement and Indemnity Agreement was NOT COMPLETE (missing Exhibit 5), and had NOT BEEN SIGNED by all parties at the time of its filing by Steven Guttman, Esq. and its stamped approval by his Honor. This witness is also expected to testify as to the reasons why he failed to disclose his professional relationships to other parties materially related to this case, in particular Mary Lou Woo, Steven Guttman, Alan J. Ma, James N. Duca, Bradley R. Tamm, Susan Tius, Kamehameha Schools/Bishop Estate, Sukamto Sia, Guido Giacometti, Michelle Tucker, Sterling & Tucker, William S. Richardson, Earl Anzai, Lyn Anzai, Aloha Airlines, Hawaiian Airlines, Amfac/JMB, JMB Realty Corp., General Growth Partners, WorldPoint Interactive, William BurgessGoldman Sachs, June Jones, and others to be determined upon discovery.

Judge Lloyd King will also be asked why he did not recuse himself from this case, and why he allowed Defendant Harmon’s attorneys Greg Dunn and Bradley Tamm to withdraw as his attorneys before the case was finished.

Internet References:





Pension-Related Links



Apartheid Hawaiian Style


Broken Trust: Greed, Mismanagement & Political Manipulations



Lost Generations: A Boy, A School, A Princess


The Na Kumu Book Advisory Group





First Amendment Rights/Obstruction of Justice
















Hawaii Dept. of Labor - CV 98-2394-05 - Unemployment Insurance Appeal




RICO Lawsuit - 99-CV-00304-DAE-BMK









Equity 2048 -The Richards Report


XL Reinsurance Policy No. XLRKS-01796




Equity 2048 - Related Correspondence and Documents














IRS Closing Agreement for Kamehameha Schools



Documents, News Articles and Related Links























































Originally posted: August 22, 2005
Latest update: September 26, 2009

Website: http://www.kycbs.net