Maui Files Suit Claiming it was Stranded with $44 Million in Debt Securities

By Wendy Osher

The County of Maui is demanding a jury trial in a lawsuit it filed last week against Merrill Lynch Pierce Fenner & Smith Inc. The county claims it was stranded with $44.2 million in debt instruments when the firm abandoned its practice of supporting auctions for the SLARS or Student Loan Auction Rate Securities.

According to the docket filed with the U.S. District Court of Hawaii, the County of Maui purchased the securities on or after August 16, 2007.  The suit claims the firm abandoned its practice of supporting SLARS auctions on or about February 13, 2008, claiming it could no longer sell the securities at par.

Today, the County of Maui owns $32 million of SLARS that are not liquid.

The County of Maui further claims it would not have purchased SLARS at all if it had known of the grown risks associated with the investments.

SLARS are secured by pools of student loans guaranteed by government agencies under the Federal Family Education Loan Program.

Maui Mayor Charmaine Tavares is expected to comment on the litigation during a press conference in Honolulu later today.


Oregon Man Faces Criminal Complaint Following Rerouted Maui Flight

By Wendy Osher

An Oregon man accused of interfering with a flight crew bound for Maui last week, faces a criminal complaint for allegedly interfering with the flight crew, an offense that carries penalties of up 20 years in jail if convicted.

56-year-old Joseph Hedlund Johnson of Salem, Oregon was removed from a Hawaiian Airlines Flight on Wednesday, January 6, 2010.  Hawaiian Airlines Flight 39 had already been in flight for at least 90 minutes, when it turned around and was escorted back to PDX by two F-15 fighter jets deployed from the Oregon Air National Guard.

According to the 13-page complaint filed in U.S. District Court, the action was taken because a passenger allegedly handed a threatening note to a flight attendant containing references to death, a plane crash, and Gilligan’s Island.

Pacific Radio Group & obtained access to the document and a copy of the note, which was written on an airline comment card, and included in the affidavit.  The note stated:

Airline comment card included in U.S. District Court Affidavit.

“I thought I was going to die, we were so high up, I thought to myself: I hope we don’t crash and burn or worse yet, landing in the ocean, living through it, only to be eaten by sharks, or worse yet, end up on someplace like Gilligan’s Island, stranded, or worse yet, be eaten by a tribe of headhunters, speaking of headhunters, why do they just eat outsiders, and not the family members?  Strange…and what if the plane ripped apart in mid-flight and we plumited (sic) to earth, landed on Gilligan’s Island, and then lived through it, and the only woman there was Mrs. Thurston Howell III?  No Mary Anne (my favorite) no ginger, just Lovey!  If it were just here, I think I’d opt for the sharks, maybe the headhunters.”

After being removed from the flight, Johnson told federal investigators that he thought the card was going to be taken back to an office somewhere, opened, and everyone in the room would “get a laugh” from it, and that perhaps he’d even get some frequent flyer miles out of it.

He stated that he felt bad about what had happened and that he was sorry.

Prior to receiving the note, flight attendants recalled a discussion that focused on the placement of Johnson’s carry on bag, in which he was informed that space below his seat was designated for the passenger seated behind him.

Johnson told Federal investigators that he held his bag for a short amount of time until a woman seated a few rows behind him made space in the overhead storage bin above her seat.

According to the affidavit, Johnson told investigators that he felt that a person would need to be “ten feet tall” to need that much space.

Johnson was released when the FBI determined that he did not present an immediate threat to public safety, and the incident appeared to have no nexus to terrorism.  However, based on the investigation, authorities filed a criminal complaint alleging violation of the US code that prohibits interference with the performance of the flight crew.