Wed, May 20, 2009
US Bankruptcy Judge Lloyd King
apparently was not impressed by all the nice things Mesa Air Group
wanted to do for the former emplyees of Aloha Airlines. The
Associated Press reports King ruled last week that Mesa cannot use
the "Aloha" name on its Hawaiian "go!" subsidiary, even through a
licensing deal with the former Aloha stockholder who now controls
the bankrupt company's assets.
"go!" came on the scene in 2006, providing serious price
competition in what had been a very sleepy inter-island
marketplace. Mesa was found to have engaged in illegal
anti-competitive behavior when it presented itself as a bidder for
struggling Hawaiian Airlines, then used information gained
confidentially to compete with Hawaiian and Aloha. Mesa was ordered
to pay a settlement of 80-million dollars.
Aloha succumbed to the price war, shutting down service last
year. Mesa was moving to take over the name and intellectual
property of the former Aloha airlines for as little as 6-million
dollars. The seller was Yucaipa Companies, LLC, which reportedly
lost investments totalling 113-million dollars when Aloha went
bust. Mesa had also promised to provide some additional benefits to
former Aloha workers displaced by the shutdown.
The apparent attempt to buy out Aloha's good reputation has not
sat well with Judge King, who has now blocked the name change, even
though Yucaipa was the winning bidder for Aloha's assets. In his
denial he said, in part, quote...
"Mesa succeeded in inflicting great harm, not only upon the
Aloha corporate entities, but also upon thousands of Aloha
employees and their families. Now, through Yucaipa, Mesa seeks to
perfect its wrongdoing by becoming Aloha."
"As a further complication, Mesa's past dishonesty in this court
will surround any hearing in which its veracity is at issue with an
atmosphere of disbelief."
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