The future of Aloha Airlines will come down to an appeal that will be decided tomorrow in U.S. District Court over whether Hawai'i's second-largest airline can turn its pension responsibilities over to the federal Pension Benefit Guaranty Corp.

U.S. Judge Michael Seabright late yesterday agreed to rule on PBGC's appeal tomorrow afternoon, the same day that Aloha attorneys say the airline's current funding expires.

Aloha officials also hope that a ruling in their favor will clear the way for Aloha to exit bankruptcy under new owners, who will inject up to $100 million in new capital.

Attorneys for Aloha Airlines and Aloha Airgroup, Inc. have said that terminating the employee-defined benefit plans is a condition of Aloha's prospective new owners, California billionaire Ron Burkle's Yucaipa Companies and former NFL football star Willie Gault's Aloha Aviation Investment Group.

"Without a replacement loan, this company is dead," Aloha attorney David C. Farmer told Seabright. "It will shut down. These two events are on a collision. ... It's a matter of life or death to the company."

Seabright's decision to hear the PBGC's appeal capped a flurry of legal activity that began yesterday morning in U.S. Bankruptcy Court, where Judge Robert Faris told Aloha's attorneys there was "no way" they would be able to proceed with their plans to exit bankruptcy by tomorrow.

"I hope you have a Plan B," Faris said.

But Seabright agreed to speed up PBGC's appeal to meet Aloha's deadline tomorrow.

"It puts a lot of pressure on me," Seabright said. But he cited "the irreparable harm" to Aloha and its nearly 3,600 employees if he did not hear the appeal.

"Now that all of the facts have been established, new contracts have been ratified by all Aloha employee bargaining groups and creditor issues have been resolved," Aloha said in a statement yesterday, "it is unfortunate that the PBGC is challenging the court's order confirming Aloha's plan of reorganization. ... We believe that it is in everyone's best interest for the PBGC to revisit its appeal, respect the court's order confirming Aloha's plan to exit bankruptcy and work with Aloha to complete this transaction."

Attorneys for the PBGC did not return telephone calls seeking comment.

Reach Dan Nakaso at dnakaso@honoluluadvertiser.com.