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Aloha Airlines pension plans agreed upon

June 25, 2009
Maui Weekly

Pacific Business News - According to officials from the U.S. Department of Labor, two Hawai‘i banks and Aloha Airlines have agreed to pay nearly $10.5 million to make up for the losses suffered by the bankrupt airline’s numerous pension plans. The airlines, Bank of Hawai‘i (BOH) and First Hawaiian Bank, have agreed upon separate settlements with the department, in which they will pay a total of $9.5 million to the three pension plans to make up for what they lost on stock investments of Aloha’s bankrupt holding company. They will also pay an additional $954,546 in civil penalties to the plans, by way of their trustee, Pension Benefit Guaranty Corporation. The Labor Department’s news release stated that Aloha will pay $5.5 million, and the two banks will pay $2.5 million each. The department asserted that Aloha and BOH had “allegedly caused or permitted the plans to buy stock of the airline’s holding company” back in the fall of 2000 for more than its “fair market values,” which breached their “fiduciary duties” under the federal Employee Retirement Income Security Act. Although First Hawaiian Bank’s portion of the investments weren’t involved in these transactions, the government contended that they did assist in the stock transaction and thus “violated its duties as a co-fiduciary.”

 
 

 

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