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Judge denies Mesa's bid to license Aloha name

By Dave Segal

POSTED: 10:20 a.m. HST, May 15, 2009

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Mesa Air Group's attempt to rebrand its go! aircraft with the Aloha Airlines name has been denied.

Federal Bankruptcy Judge Lloyd King said in a written ruling last night that Yucaipa Cos., the former majority owner of the now-liquidated carrier and the likely winner of an auction for Aloha's intellectual property, cannot bid for those rights.

King said in his ruling that he was denying a renewed motion by Aloha's Chapter 7 trustee, Dane Field, to conduct an auction for Aloha's intellectual property rights because Yucaipa had a deal to license the Aloha name to go! for 10 years. King said there has been no suggestion of misconduct by Yucaipa.

"Standing alone, with no connections to Mesa and appropriate assurance that no interest  in the Aloha IP  would ever pass to Mesa, there is no apparent cause to deny Yucaipa the ability to credit bid," King wrote.

However, he said that since the trustee's motion and the asset purchase agreement do not identify Mesa as a co-purchaser or even mention the license of the intellectual property which Yucaipa is obligated to give to Mesa, "cause exists to deny the credit bid."

A previous auction won by Yucaipa was earlier invalidated because a newspaper reporter was not allowed in to the "public" auction.

Yucaipa had agreed to license the Aloha name to Mesa for 10 years for a minimum of $600,000 a year as part of a legal settlement in which Mesa paid Yucaipa $2 million.

Yucaipa had purchased a lawsuit by Aloha against Mesa in which Aloha sued the Phoenix-based carrier for misusing Aloha's confidential information obtained as a potential investor in 2005 during Aloha's first bankruptcy.

Aloha, which ceased passenger operations on March 31 of last year, partially blamed go! for its demise.

King's ruling does not invalidate the remainder of the legal settlement between Mesa and Yucaipa.

Yucaipa, which is owed between $85 million and $90 million by Aloha, had submitted a starting credit bid of $500,000 -- reducing by that amount what it is owed by Aloha -- plus an additional $25,000 in cash to be deposited into the Aloha estate's administrative fund.

"This court has an independent power and duty to examine the propriety of a proposed sale of property of a bankruptcy estate, and it cannot allow its authority to be misused in a way that would reward Mesa for its misconduct," King said.

Mesa Air Group's attempt to rebrand its go! aircraft with the Aloha Airlines name has been denied.


Federal Bankruptcy Judge Lloyd King said in a written ruling last night that Yucaipa Cos., the former majority owner of the now-liquidated carrier and the likely winner of an auction for Aloha's intellectual property, cannot bid for those rights.

King said in his ruling that he was denying a renewed motion by Aloha's Chapter 7 trustee, Dane Field, to conduct an auction for Aloha's intellectual property rights because Yucaipa had a deal to license the Aloha name to go! for 10 years. King said there has been no suggestion of misconduct by Yucaipa.

"Standing alone, with no connections to Mesa and appropriate assurance that no interest  in the Aloha IP  would ever pass to Mesa, there is no apparent cause to deny Yucaipa the ability to credit bid," King wrote.

However, he said that since the trustee's motion and the asset purchase agreement do not identify Mesa as a co-purchaser or even mention the license of the intellectual property which Yucaipa is obligated to give to Mesa, "cause exists to deny the credit bid."

A previous auction won by Yucaipa was earlier invalidated because a newspaper reporter was not allowed in to the "public" auction.

Yucaipa had agreed to license the Aloha name to Mesa for 10 years for a minimum of $600,000 a year as part of a legal settlement in which Mesa paid Yucaipa $2 million.

Yucaipa had purchased a lawsuit by Aloha against Mesa in which Aloha sued the Phoenix-based carrier for misusing Aloha's confidential information obtained as a potential investor in 2005 during Aloha's first bankruptcy.

Aloha, which ceased passenger operations on March 31 of last year, partially blamed go! for its demise.

King's ruling does not invalidate the remainder of the legal settlement between Mesa and Yucaipa.

Yucaipa, which is owed between $85 million and $90 million by Aloha, had submitted a starting credit bid of $500,000 -- reducing by that amount what it is owed by Aloha -- plus an additional $25,000 in cash to be deposited into the Aloha estate's administrative fund.

"This court has an independent power and duty to examine the propriety of a proposed sale of property of a bankruptcy estate, and it cannot allow its authority to be misused in a way that would reward Mesa for its misconduct," King said.

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