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Patricia O'Connell
Senior Communications Manager

Multi-Million Dollar Judgment against China's Hainan Airlines Becomes Final

$14 million court award to be enforced immediately

September 12, 2008

Wiley Rein LLP partner H. Jason Gold, the court authorized liquidating trustee for the bankruptcy estate of Dornier Aviation North America (DANA), announced today that the civil judgment of $14 million entered against Hainan Airlines, a major international airline based in China has become final.  Suit had been brought in December 2003  to recover unpaid accounts and compensation for aircraft parts being held in China.  United States Bankruptcy Judge Steven S. Mitchell conducted the trial in August 2006.  Gold was represented by attorneys from the law firm of Wiley Rein LLP, including partners Alexander M. Laughlin and Todd A. Bromberg, as well as associates Kalina B. Miller and Dylan G. Trache.

"This was a hard-fought case spanning several years and I'm pleased that the judgment is now final and that it includes an award of over $6.5 million in interest as well as more than $1.8 million in attorneys' fees.  The time for filing any appeals has now expired, so we are free to enforce the judgment by using judicial processes world-wide to seize aircraft and other assets owned by Hainan," said Gold.  "The recovery of this judgment will eventually permit us to pay millions of dollars more to the creditors of the bankrupt company, including dozens of employees and businesses who have gone all of these years waiting for Hainan to pay the amounts it owes.  The recovery of large sums from other parties has previously allowed us to pay over $5,000,000 to these creditors, but there still remains about $15,000,000 in unpaid claims."

The lawsuit against the China based Hainan Airlines was heard in the United States Bankruptcy Court for the Eastern District of Virginia in Alexandria, the court where the DANA bankruptcy was filed in 2002.  "The assets of DANA included unpaid amounts from various companies, foreign and domestic, with which DANA did business.  In some cases it was necessary to bring suits to recover these sums, and Hainan Airlines is the largest remaining unpaid account in this case," Gold said.  Separately, the DANA Liquidating Trust is prosecuting an additional claim against Hainan in the International Court of Arbitration of the International Chamber of Commerce.  In that arbitration, Gold is seeking another $14 million from Hainan, also for unpaid aircraft parts, as well as the value of the aircraft parts held by Hainan in China along with additional interest and attorneys' fees. 

Gold is head of Wiley Rein LLP's Bankruptcy & Financial Restructuring Practice. The firm serves as Gold's counsel in the DANA/Hainan Airlines litigation.