Hawaiian Airlines Inc. expects a U.S. Bankruptcy Court judge to confirm a $150 million reorganization plan that would allow the airline to emerge from bankruptcy as soon as the end of this week and pay back its largest creditors.


U.S. Bankruptcy Judge Robert Faris is expected to confirm a joint reorganization plan at a hearing in Hawaii on Thursday. The plan was submitted by airline trustee Joshua Gotbaum and Larry Hershfield, chairman the airline's parent, Hawaiian Holdings Inc., and chief executive of its biggest shareholder, Ranch Capital LLC. Honolulu-based Hawaiian Holdings is not part of the bankruptcy.


Jason Reese, an advisor to Ranch Capital and co-president of Imperial Capital in Beverly Hills, said the plan includes a $25 million revolving line of credit, a $25 million term loan from Wells Fargo Foothill, and a $100 million convertible bond issue.


Ranch Capital bought 10 million shares of Hawaiian Holdings last year for $41.1 million and said it would commit at least $160 million to restructure the airline.


Under the plan, Hawaiian's largest creditors Boeing Capital Corp. and Ansett Worldwide Aviation Services would be fully repaid, either in cash, stock or notes. The company would be able to emerge from bankruptcy with $100 million in cash and $25 million in debt, Reese said.

Hawaiian Airlines filed for Chapter 11 bankruptcy protection in 2003. Last month, the airline reached a tentative three-year agreement with its pilots' union, one of six unions that had to ratify new contracts for the carrier to exit bankruptcy.


Shares of Hawaiian were trading at pennies on the dollar two years ago but have jumped to $6.60 a share.


Hawaiian Airlines' former chairman, John Adams, was ousted from the carrier by a bankruptcy judge last year after failing to disclose important negative financial information to shareholders after netting $17 million in stock buyback. He agreed to pay $2.5 million to settle claims with the Securities and Exchange Commission.

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