David C. Farmer vs. Harmon - Witness Mark Dunkerley, CEO, Hawaiian Airlines

THE UNITED STATES DEPARTMENT OF JUSTICE

OFFICE OF THE U.S. TRUSTEE

David C. Farmer, Successor Trustee
vs.
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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DEFENDANT’S WITNESS

MARK DUNKERLEY

Web Site: www.hawaiianair.com

Hawaiian Holdings Inc.
P.O. Box 30008,
Honolulu, Hawaii 96820
HQ Fax: (808) 835-3690

Mark Dunkerley became the president and chief executive officer of Hawaiian Holdings and Hawaiian Airlines upon the emergence of Hawaiian Holdings from Chapter 11 on June 2nd, 2005. Mr. Dunkerley joined Hawaiian Airlines as president and chief operating officer in December 2002 (and served in the same capacities for Hawaiian Holdings until June 2005).

From August 2001 until March 2002, he was the chief operating officer of the Sabena Airlines Group located in Brussels, Belgium. In 2001, Mr. Dunkerley served as a consultant with the Roberts Roach firm, which specializes in providing strategic and economic consulting services to the aviation industry.

From 1999 to 2000, Mr. Dunkerley was president, chief operating officer and a member of the board of directors of Worldwide Flight Services, one of the largest providers of ground services to airlines including baggage and passenger check-in handling at airports worldwide.

From 1989 to 1999, Mr. Dunkerley worked for British Airways, where he held a variety of management positions including, most recently, as senior vice president for British Airways’ Latin America and Caribbean division from 1997 to 1999. Mr. Dunkerley has a M.Sc. in Air Transport Economics from the Cranfield Institute of Technology and a B.Sc. In Economics from the London School of Economics, both located in the UK.

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April 17, 2009

Hawaiian Airlines CEO earned $3.2M in ’08

Pacific Business News (Honolulu) - by Chad Blair

Mark Dunkerley earned $3.2 million in 2008 as president and CEO of Hawaiian Airlines, almost $1 million more than he received in 2007.

Dunkerley’s 2008 earnings included a $236,000 bonus and $1.2 million in stock awards. He received $2.3 million in total compensation in 2007.

His annual base salary increased $33,000 to $583,000.

The salary details for Hawaiian, owned by Hawaiian Holdings (Nasdaq: HA), comes from a notice of shareholders filing made Friday to the Securities and Exchange Commission.

Thomas Fargo, a former member of Hawaiian Holdings’ board of directors, received $61,000 from Hawaiian last year.

Fargo, who became president and CEO of Hawaii Superferry in late April 2008, resigned from the Hawaiian Holdings board Oct. 20 “due to personal reasons,” according to the SEC filing. Upon his resignation, he forfeited an unvested deferred stock option of $3,847.

Another member of Hawaiian Holdings board of directors, Bert Kobayashi Jr., received $106,000 in compensation. He is a senior partner with the Honolulu law firm Kobayashi Sugita & Goda.

Honolulu attorney Crystal Rose, a partner with Bay Deaver Lung Rose & Holma, received $116,000.

"By almost any measure, Hawaiian's performance in the face of enormous challenges in 2008 was remarkable. In a year when record fuel prices and the onset of recession led to large losses at most airlines, and forced other companies out of business or into bankruptcy, senior management made the right decisions and Hawaiian ended the year stronger than it started, to the benefit of all its employees, customers and shareholders," Lawrence S. Hershfield, chairman of the Hawaiian Holdings board, said in a statement.

On April 28, Hawaiian, Hawaii’s largest carrier, will report financial results for the three months ended March 31.

http://www.bizjournals.com/pacific/stories/2009/04/13/daily67.html

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THE BEST GOVERNMENT MONEY CAN BUY

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NEW DISCOVERY (05-08-08): David Farmer’s undisclosed conflicts of interest with Hawaiian Airlines and Hawaiian Airlines’ Chairman and CEO, Mark Dunkerley:

May 10, 2004

Hawaiian Airlines' president in holding pattern

By Debbie Sokei, Advertiser Staff Writer

The future of the man credited in large part with turning Hawaiian Airlines into a profitable venture once again will be up to the group that wins the bidding to take over the airline.

Forty-year-old Mark Dunkerley, Hawaiian's president and chief operating officer, joined the airline in January 2003 after a career with British Airways and Belgian carrier Sabena Airlines.

Since Dunkerley joined Hawaiian, the carrier has posted 12 consecutive months of operating profits and has ranked as the nation's No. 1 on-time airline for the past five months.

But while Hawaiian's path appears clear and on track to emerge from Chapter 11 bankruptcy in September, Dunkerley's future remains in limbo.

"You'd like to think when the new owners come in and the current management team is doing a good job, you would think they would keep them," said Bill Oliver, consultant with the Boyd Group, a Colorado-based airline consulting firm. "Unfortunately, that is not always the case."

Several bidders have proposed to take Hawaiian out of bankruptcy, and one plan will be chosen by Federal Bankruptcy Judge Robert Faris on Aug. 31.

Hawaiian filed for bankruptcy in March 2003 after the airline failed to reach agreement with Boeing Capital Corp. on lowering the cost of leases for Hawaiian's planes.

Corporate Recovery Group LLC, a Wyoming-based turnaround company and one of the bidders, said it will bring in its own management team if its plan is selected.

Bruce Nobles, former CEO of Hawaiian and a member of CRG, said he hasn't had the opportunity to talk to Dunkerley about staying on should that company prevail. "It's premature for me to speculate if he will be part of the team," Nobles said.

Hawaiian Holdings Inc., the parent company of Hawaiian Airlines, and Vx Capital Inc., a San Francisco-based airline investment company, are also proposing to take over the airlines.

Both investor groups have said they would retain Dunkerley.

Stephen Compagni Portis, a partner in Vx Capital, said Dunkerley has an impressive track record.

"If we are going to make an investment of $30 million, we need to be highly confident in the man who is going to lead this airline going forward as CEO," Portis said. "In a short period of time, Dunkerley has achieved some very impressive top-line revenues and bottom-line profitability."

Steadier performance

Hawaiian reported operating profit of $77.5 million and net loss of $49.5 million for 2003, compared with an operating loss of $52.2 million and a net loss of $57.4 million in 2002. The company also reported positive cash flow of $87 million for 2003, compared with $71 million the year before.

John Adams, chairman of Hawaiian Holdings, hired Dunkerley when Adams was the CEO of the airline before the bankruptcy filing. Dunkerley would be promoted to CEO under Hawaiian Holdings' reorganization proposal.

A shadow, however, hangs over Adams' bid to regain control of Hawaiian Airlines. The SEC is investigating Adams and Hawaiian Holdings for a $25 million stock buy-back program offered in May 2002 that critics said enriched Adams and his companies.

The buy-back program was one of the reasons that Hawaiian ended up under Chapter 11 protection and why the court appointed a trustee, Josh Gotbaum, to oversee the airline.

Given past events, Dunkerley's loyalty to Gotbaum might come into question. But Gotbaum has nothing but praise for Dunkerley's performance and leadership.

"As COO, Mark has done a superb job at both developing a vision for Hawaiian Airlines and bringing the management team together to implement it," Gotbaum said.

Despite his apparent support for Dunkerley, Gotbaum declined an Advertiser request to interview Dunkerley for this story. He said he did not want investors to think the airline management team is siding with any particular bidder.

Experienced manager

Dunkerley is a licensed commercial pilot with a bachelor's degree from the London School of Economics and a master's degree in aeronautics from the Cranfield Institute of Technology in the United Kingdom. His first position in aviation came as assistant to the CEO of Miami International Airport from 1985 until 1989.

Dunkerley then worked for 10 years at British Airways in various management positions, including three years as senior vice president for the airline's Latin America and Caribbean division.

In 1999 and 2000, Dunkerley served as president and chief operating officer at Worldwide Flight Services, a Dallas-based airport ground service provider. A year later, Dunkerley moved to Belgium, Brussels, where he was chief operating officer of Sabena Airlines Group before joining Hawaiian.

Jim Donovan, spokesman for Panda Travel Inc., one of Hawaiian's vendors and creditors, said Dunkerley has been able to establish a positive relationship with his employees, even with the severe cost-cutting that followed the Sept. 11, 2001, terrorist attacks.

"Mark has done a very good job in building trust," Donovan said. "If you have trust and teamwork, you have a real good chance of success."

Some Hawaiian Airlines employees, who spoke to The Advertiser on condition of anonymity after an edict issued by Gotbaum barring employees from talking to the media, said Dunkerley is liked by the rank-and-file. He has an open-door policy and a positive, "hands-on leadership style," they said.

Robert Winner, committee chairman of the clerical unit of the International Association of Machinists union, echoed the workers' generally positive take on Dunkerley.

"I have worked for the company for 35 years and I have never seen the president of the company come down and work on the ramp loading and unloading bags like he has," Winner said. "He also worked with the cleaners, the employees at the lowest level. I think he gained a lot of respect from the employees for doing that."

Skeptic speaks out

The praise, however, is far from unanimous. Jeff Lilley, a pilot for Hawaiian Airlines, said the company's success wasn't Dunkerley's doing.

"He might be a fine COO, but he's not the reason why we are where we're at today," Lilley said. "The success of the airline was put in place a few years ago under the leadership of Paul Casey, his management team, the acquisition of the fuel-efficient aircraft fleet, the excellent product the employees are putting out and the rebound of tourists coming to Hawai'i."

Dunkerley's part in Adams' management team, who some workers and Hawaiian Holdings shareholders still blame for the company's bankruptcy, could also cast a cloud over his prospects.

Even if Dunkerley isn't retained, an improving economy and growing numbers of tourists arriving in the Islands would suggest the airline will continue on an even keel.

"I don't think the profitability of the airline is going to turn whether he is there or not," said bankruptcy attorney David Farmer, who previously did legal work for a Hawaiian creditor.

"There are so many external factors — world events, the political climate — that will have a great deal (of impact) on Hawaiian's position in the market. It's all about hope and best guesses."

Reach Debbie Sokei at 525-8064 or dsokei@honoluluadvertiser.com

. Honolulu Advertiser, May 10, 2004

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GOOGLING FOR MARK DUNKERLEY

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May 8, 2008

Hawaiian CEO sells $2M in stock

By Rick Daysog, Advertiser Staff Writer

Hawaiian Airlines Chief Executive Officer Mark Dunkerley sold about $2 million in company stock this month, the company disclosed in a regulatory filing.

According to a filing with the Securities and Exchange Commission, Dunkerley sold 200,000 shares at $8.59 a share on May 2 and another 33,570 at $8.45 per share that same day.

The company said Dunkerley continues to own a "significant amount of the company's equity."

The sale — Dunkerley's first since he joined the company in 2002 — leaves the CEO with 225,000 shares of restricted stock. He also has options to purchase another 1.6 million shares.

Hawaiian Holdings Inc., the airline's parent, said Dunkerley was restricted in his ability to sell shares of the company's common stock to specific trading windows, and he chose to do so now for personal financial-planning reasons.

The company said that most of the stock sold, or 200,000 shares, were obtained by Dunkerley after he exercised a stock option granted to him in 2002. Those options were part of an incentive package to retain the executive when the airline was under Chapter 11 bankruptcy protection, Hawaiian Holdings said.

The option allowed Dunkerley to buy the 200,000 shares at $2.10 each. In selling the shares for $8.59 each, Dunkerley netted $6.49 a share, or a total of about $1.3 million.

Hawaiian's shares closed at $7.10, down 33 cents yesterday on the American Stock Exchange.

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April 13, 2008

Hawaii CEOs average $2.3M in pay

By Rick Daysog, Advertiser Staff Writer

It's getting more expensive to send off a CEO than to keep one.

The abrupt resignations of the top executives of Central Pacific Financial Corp. and Hawaiian Telcom Inc. this year is going to cost those companies hundreds of thousand of dollars more than what they paid the CEOs last year.

Despite losing $5.8 million last year because of problem loans to California homebuilders, Central Pacific said it will pay CEO Clint Arnoldus $5 million, or more than five times his 2007 pay of $983,149, when he retires at year's end.

Hawaiian Telcom Inc. gave ousted CEO Michael Ruley a $1.2 million severance package, which includes $20,000 for personal travel, $22,000 for his family's health coverage and reimbursement of up to 6 percent for the real estate broker commission on the sale of his Kahala home. During Ruley's tenure, the company lost tens of millions of dollars and thousands of residential telephone customers, and is being investigated by the state Public Utilities Commission for poor service.

"This has nothing to do with the circumstances of their leaving," said Linda Lampkin, research director with ERI Economic Research Institute, which conducts executive pay and cost-of-living studies for employers. "Even though they may be leaving on less than ideal situations, the companies are bound by what the executives' contracts say."

The severance packages for Ruley and Arnoldus were among the key highlights of an Advertiser review of the pay policies of Hawai'i's publicly traded companies. The study, based on filings with the Securities and Exchange Commission by Hawai'i's eight largest companies, found that the average pay for a local CEO rose nearly 4.5 percent to $2.3 million last year from $2.2 million in 2006.

The 2007 average was equivalent to $6,525 per day and is more than 29 times the state's median household income.

Five of the 10 CEOs in this year's survey received pay raises but just two received a bonus last year. The bulk of the pay increases came in the form of stock options and other forms of compensation that aim to tie the executives' pay to company performance.

To be sure, the state's top bosses earned far less than their Mainland counterparts. According to ERI, CEOs of the nation's largest publicly traded companies saw their compensation increase by 20.5 percent last year to $18.8 million. The pay increase came as the companies' revenues grew by just 2.8 percent, ERI said.

For the third year in a row, Alexander & Baldwin's Allen Doane was the highest paid executive in Hawai'i, with a pay package of $8.6 million. That was up about 12.4 percent from his 2006 pay of $7.6 million.

Most of Doane's increase was performance-based as the company's stock price increased 19 percent and its earnings jumped 16 percent. A&B added that it returned $81 million to its shareholders last year in the form of dividends (non-taxable, thanks to Bush baby?) and stock buybacks.

Doane was followed by David Cole, CEO of Maui Land & Pineapple Co., whose 2007 pay more than doubled to $4.1 million. In its proxy statement, Maui Pine said its board gave Cole more than a $1 million to compensate him for the loss in value of his stock options.

Most companies would not comment on their CEO's pay and referred The Advertiser to filings with the SEC. Here's a snapshot of what those filings say:

Bank of Hawaii Corp. Chief Executive Allan Landon took home $2.6 million last year, which was up 15.9 percent from the previous year. Under Landon's stewardship, the company enjoyed healthy growth increase and benefited from its cost-cutting efforts.

Hawaiian Electric Industries Inc.'s CEO Constance Lau's 2007 compensation fell 53.7 percent to $1.7 million. But her 2006 package was skewed by a $2.2 million, one-time gain she received when she transferred her pension plan from HEI's American Saving Bank subsidiary to the parent company's plan.

Morton Kinzler, Barnwell Industries Inc.'s longtime CEO, saw his pay decline by 21.2 percent to $1.2 million while Dustin Shindo, chief executive of startup Hoku Scientific Inc., earned $745,462, which represents a 41.2 percent raise from the previous year.

Hawaiian Airlines Inc. CEO Mark Dunkerley saw his pay decrease by 5.8 percent to $2.3 million in a year in which Hawaiian won an $80 million judgment against go! airlines and signed a $4.4 billion deal to acquire 24 Airbus wide-body jets over the next 15 years.

The Honolulu Advertiser

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PHOTO GALLERY

http://www.op.gov.ph/photogallery_ph4-041608.asp

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NEW DISCOVERY (05-04-08): Undisclosed conflicts of interest between Randall Wulff, Larry Silverstein, U.S. Attorney General Michael Mukasey, David C. Farmer, Steven Guttman, Roy Hughes, Colbert Matsumoto, James Watanabe, J. Douglas Ing, Diane Hastert, Bert Kobayashi, Warren Price III, James Duca, Chubb Group, Marsh & McLennan, AIG, Mark Dunkerley, and others:

April 21, 2004

Wulff Chosen to Head 9/11 Panel
on WTC Loss

Attorney was picked by judge in New York to help
on panel determining value of damages

By Josh Richman, STAFF WRITER, The Oakland Tribune

An East Bay attorney and mediator will play a pivotal role in determining the amount of loss resulting from the World Trade Center's destruction at the hands of terrorists Sept. 11, 2001.

Randall W. Wulff of Piedmont was selected Tuesday by U.S. District Chief Judge Michael B. Mukasey of New York to be chief umpire on a three-person appraisal panel that will address reconstruction costs as well as rental value and business interruption damages. Hearings are expected to begin later this year.

The battle over the monetary costs of the World Trade Center's destruction, and who will be paid how much for those costs, has become almost as twisted as the wreckage of the towers. And the battle has turned somewhat political, with New York officials touting the rebuilding of Ground Zero as crucial to the region's economic recovery.

World Trade Center leaseholder Larry Silverstein claims his insurers owe him almost twice their policy limits -- as much as $6.8 billion -- based on a switch in insurance forms that he believes recognizes the two impacts by two hijacked jet airliners as two separate losses. His claim went to a six-man, six-woman federal jury Monday after a 10-week trial.

After the jury -- and those in future proceedings involving other members of Silverstein's jury pool -- has determined the extent of the insurers' liability, it'll be up to Wolff's panel to determine what the actual losses are.

Wulff was with San Francisco's Farella, Braun and Martel from 1974 -- first as a trial lawyer, and from 1994 on as a "neutral" mediator -- until 2000, when he cofounded Oakland's Wulff Quinby Sochynsky, which exclusively provides mediation, arbitration and other alternative dispute resolution services.

He has helped settle almost 2,000 cases in the past 15 years, including the recent $1.1 billion settlement of the California class action against Microsoft. He also has helped resolve monetary disputes related to renovation of the Oakland Arena and construction of other high-profile projects from ballparks to Las Vegas casinos. And he has authored, edited or co-edited books on alternative dispute resolution.

His firm's Web site says his daily fee is $9,500 for cases in the Bay Area or Sacramento, $11,000 for cases elsewhere.

Wulff holds an undergraduate degree from the University of Oregon, attended the Netherlands Institute of International Business and holds a law degree from the University of California, Hastings College of the Law in San Francisco.

http://www.wqsadr.com/articles.html

REFERENCES

A sample of names follows here. A lengthier list of specific references from counsel and parties in cases where Mr. Wulff has acted as mediator is also available upon request....

Hawaii

Diane D. Hastert, Esq.
Damon Key Leong Kupchak Hastert
1600 Pauahi Tower, 1001 Bishop Street
Honolulu, HI 96813
Telephone: 808-531-8031

Bert T. Kobayashi, Esq.
Kobayashi, Sugita & Goda
First Hawaiian Center, Suite 2600
Honolulu, HI 96813
Telephone: 808-529-8700

Andrew Winer, Esq.
Winer Heheula & Devens
Pali Palms Plaza
970 North Kalaheo Ave, Suite A-300
Kailua, HI 96734
Telephone: 808-254-5855

David Schulmeister, Esq.
Cades Schutte Fleming & Wright
1000 Bishop Street, Suite 1000
Honolulu, HI 96813
Telephone: 808-521-9200

John T. Hoshibata, Esq.
Crabtree & Hoshibata
2300 Pauahi Tower
1001 Bishop Street
Honolulu, HI 96813
Telephone: 808-524-5644

Elton John Bain
Kessner Duca Umebayashi Bain & Matsunaga
19^th Floor, Central Pacific Plaza
229 South King Street
Honolulu, HI 96813

Warren Price III, Esq.
Price Okamoto Himeno & Lum
Ocean View Center
707 Richards Street, Suite 728
Honolulu, HI 96813
Telephone: 808-538-1113

Roy F. Hughes
Hughes & Taosaka
900 Pauahi Tower
1001 Bishop Street
Honolulu, HI 96813
Telephone: 808-526-9744

Brad S. Petrus
Tom Teetrus & Miller
The Arcade Building
212 Merchant Street, Suite 200
Honolulu, HI 96813
Telephone: 808-522-0800

Milton M. Yasunaga
Cades Schutte Law Firm
1000 Bishop Street, Suite 1200
Honolulu, HI 96813
Telephone: 808-521-9200

John T. Komeiji
Watanabe Ing & Komeiji
999 Bishop Street, 23^rd Floor
Honolulu, HI 96813
Telephone: 808-544-8300

Roger Moseley
Moseley Biehl Tsugawa Lau & Muzzi
1100 Alakea Street, 23^rd Floor
Honolulu, HI 96813
Telephone: 808-531-0490

James T. Paul, Esq.
Paul Johnson Park & Niles
Pacific Tower, 1001 Bishop St., Suite 1300
P.O.Box 4438
Honolulu, HI 96812
Telephone: 808-524-1212

James Lawhn
Oliver, Lau, Lawhn, Ogawa & Nakamura
707 Richards Street, Suite 600
Honolulu, HI 96813
Telephone: 808-533-3999

http://www.wqsadr.com/randallwwulff.html

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January 11, 2002

Anzai recuses self
in airlines merger

The attorney general's
wife is counsel for
Hawaiian Airlines

By Lyn Danninger, Honolulu Star-Bulletin

State attorney general Earl Anzai said yesterday he has completely recused himself from oversight of the proposed merger of Hawaii's airlines because his wife is legal counsel for Hawaiian Airlines and worked on the merger.

"It was done at the very beginning. I'm not that stupid," he said. "I have not been in a single meeting or seen a single document."

As vice president, general counsel and corporate secretary for Hawaiian Airlines, Anzai's wife, Lyn, would have played a key role in the due diligence phase and other activities related the merger.

But she has not had any direct role in negotiations with the Attorney General's office, spokesman for Hawaiian Airlines Keoni Wagner said.

The state Attorney General's office will likely play a bigger role in any approval of the Hawaiian-Aloha merger than federal regulators.

Anzai said potential conflicts of interest are not unusual and he has always recused himself from past cases in order to avoid any appearance of a conflict.

Questions regarding potential conflicts of interest were first raised as far back as Anzai's legislative confirmation hearing to become attorney general. At one time, his wife had also worked as an in-house attorney for Kamehameha School which was then under investigation by the Attorney General's office.

http://starbulletin.com/2002/01/11/business/index3.html

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Hawaiian Airlines, et al v. Gotbaum, et al

Case Number:

1:2005cv00403

Filed:

June 23, 2005

Court:

Hawaii District Court

Office:

Hawaii Office [ Court Info ]

Presiding Judge: