Posted on: Thursday, January 27, 2005
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Hawaiian trustee's expenses at $144K [/font]
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By [email="[email protected]"]Dan Nakaso[/email]
Advertiser Staff Writer[/font]
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Josh Gotbaum, Hawaiian Airlines court-appointed bankruptcy trustee, has filed claims to be reimbursed for expenses that range from $7,500 per month for the partial rent on his home and $1,000 in monthly car expenses to a $1 tip he gave in December 2003.[/font]
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[url="http://the.honoluluadvertiser.com/dailypix/2005/Jan/27/business2.jpg"]http://the.honoluluadvertiser.com/dailypix/2005/Jan/27/business2.jpg[/url][font=Trebuchet MS,Verdana]Gotbaum[/font]The figures are part of the $143,715 that Gotbaum spent as Hawaiian's trustee from September 2003 through June 2004, for which he now seeks reimbursement.[/font]
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Gotbaum filed his first major expense claim this month with the U.S. Bankruptcy Court, which must approve the request before the airline can reimburse him. Gotbaum earns $50,000 per month in salary — or $600,000 per year — overseeing Hawai'i's largest airline through its bankruptcy reorganization.[/font]
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In addition to his salary, U.S. Bankruptcy Judge Robert Faris ruled in January 2004 that Gotbaum also is entitled to be reimbursed for up to $10,000 per month for living, housing and auto expenses. He can also claim separate business-related expenses.[/font]
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Gotbaum did not respond to a request to be interviewed about his expense report, but his attorney, Sidney Levinson, provided a written reply.[/font]
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"The bankruptcy court approved reimbursement of the trustee's out-of-pocket expenses a year ago," Levinson wrote. "The United States Trustee (which represents the government in the bankruptcy case) reviewed and approved guidelines for those expenses.[/font]
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"The trustee (Gotbaum) is following all these procedures in submitting his expenses, and believes they are within the guidelines approved by the United States Trustee."[/font]
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The claims range from small to large — from $3.49 for cold medication in March 2004 during a pilots' union meeting to a Sept. 15, 2003, repayment for $1,733.37 worth of lodging at Prince Hotels in Honolulu.[/font]
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From October 2003 onward, Gotbaum claimed $7,500 in monthly housing expenses, which only covers a portion of his monthly rent.[/font]
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Gotbaum's meal claims range from $4.42 at a Los Angeles Denny's to $567.76 spent at Alan Wong's in December 2003 — a dinner that included airline consultant David Treitel, chairman and CEO of SH&E Mark Dunkerley, Hawaiian's chief operating officer and president; and other guests.[/font]
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Gotbaum also wants to be reimbursed for three separate cash tips that ranged from $1, $1.25 and $4. And Gotbaum also submitted a claim for $3 that he spent at a Starbucks in September 2003.[/font]
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Hawaiian Airlines filed for federal bankruptcy protection in March 2003, and Gotbaum was appointed trustee in July of that year.[/font]
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He originally sought $840,000 in annual salary. But after meeting with the Office of U.S. Trustee, Gotbaum lowered his compensation proposal to $50,000 in monthly salary, up to $10,000 per month in expenses and the right to request a "success fee" that will be determined by Judge Faris after Hawaiian emerges from bankruptcy.[/font]
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While Gotbaum has been in charge, Hawaiian frequently has led U.S. airlines in on-time service. Until September, Hawaiian had generated 17 straight months of profits.[/font]
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When the issue of Gotbaum's compensation was reviewed in bankruptcy court last January, a senior managing director at Ernst & Young Corporate Finance LLC declared in court documents that Chapter 11 trustees for large operating companies are rare — and trustees of large operating airlines are even more rare.[/font]
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Robert Warshauer of Ernst & Young compared Gotbaum's compensation request to chief restructuring officers and concluded that Gotbaum's salary proposal was on the "low end."[/font]
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Any opposition to Gotbaum's expense claims must be filed with the court before Monday. The Office of U.S. Trustee said it has no plans to dispute Gotbaum's request.[/font]
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The head of the pilots union said through a representative yesterday that he did not want to comment about Gotbaum's expense claims because of the "sensitive nature" of ongoing contract negotiations.[/font]
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Gotbaum filed his reimbursement claims this month at the same time that he's seeking to win further labor concessions from all of Hawaiian's five unions.[/font]
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Last week, the International Association of Machinists and Aerospace Workers voted against a new agreement. Yesterday, Gotbaum was in Los Angeles, along with Dunkerley, negotiating with Hawaiian's pilots union.[/font]
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Reach Dan Nakaso at [email protected] or at 525-8085.[/font]
Just to get the record stright. MR GUTTBOMB is not the reason Hawaiian has had the turnaround it has!!! There was probably a reason he came down on his compensation package-BECAUSE HE HASN'T DONE A THING TO JUSTIFY A BIG SALARY LIKE THAT!!! The only thing he has accomplished is to piss off the employees of Hawaiian by asking for more concessions that are not needed for us to come out of BK and support a plan (RC Aviation) that has questionable motives and shaky financing.
