An investment group that includes developer Stanford Carr, insurance executive Colbert Matsumoto and media and real estate investor Duane Kurisu will acquire a minority stake in Aloha Airlines.

The new investors, through a partnership known as Aloha Hawaii Investors LLC, will invest $2.2 million in the state's No. 2 airline, which has been operating under bankruptcy protection since December 2004.

They join California billionaire Ron Burkle's Yucaipa Companies and former NFL star Willie Gault, who agreed to invest an additional $10 million in Aloha, raising their overall investment to about $110 million.

"The new equity investment clearly strengthens Aloha's financial position and has the added advantage of participation by new Hawai'i investors," David Banmiller, Aloha's chief executive officer, said yesterday.

"We certainly hope that (the modifications) offer Aloha and its creditors the solution to the successful completion of the Aloha case and the recapitalization of the company."

The revised plan filed in federal bankruptcy court yesterday requires the approval of U.S. Bankruptcy Judge Robert Faris, who could hold a hearing as early as Thursday.

Carr is a longtime developer who has built thousands of affordable homes in Hawai'i, and Kurisu's diverse interests include ownership in several local radio stations, Hawaii Business magazine's parent and a commercial real estate firm.

Kurisu also is a partner in the San Francisco Giants baseball team.

Matsumoto, an attorney, is president of Island Holdings Inc. During the late 1990s, he helped initiate major reforms at the $7 billion Kamehameha Schools as its court-appointed master.

Matsumoto's Island Holdings and Kurisu are shareholders in the Honolulu Star-Bulletin and MidWeek newspapers and both serve on the company's board.

Aloha Hawaii also includes local investor Richard Ing and his sister, local attorney Louise Ing.

The Ings and the heirs of local developer Hung Wo Ching are selling the airline to the Yucaipa group but both families will retain a minority share.

In addition to the new capital, the airline said that its lawyers and consulting firms have agreed to reduce their combined fees by as much as $1 million, which is less than one-tenth of their billings for the entire 13-month bankruptcy.

Aloha said the modifications are due to rising fuel costs and delays caused by legal challenges to the airline's original reorganization plan.

The airline was set to emerge from Chapter 11 protection on Dec. 15 but the date was pushed back after the federal Pension Benefit Guaranty Corp. appealed the airline's plan to terminate its defined-benefit pensions for more than 3,000 employees.

The PBGC, which insures basic pension benefits, and Aloha have reached an agreement in principle, but are in the process of working out the details.

Founded in 1946, Aloha is the state's second largest airline, with more than 3,400 employees.

The company filed for Chapter 11 reorganization in December 2004 after fuel costs and other expenses soared.

Reach Rick Daysog at rdaysog@honoluluadvertiser.com.