In the Matter of the Hawaii Corporation, Debtor. George Q. Cannon v. The Hawaii Corp., by John T. Goss, Trustee for the Estate of the Hawaii Corp.

George Q. Cannon, a former director of The Hawaii Corporation (THC), appeals from an order of the district judge sitting in bankruptcy requiring him to relinquish his THC stock to the bankruptcy trustee. The district judge held that a settlement agreement executed by Cannon and THC’s trustee in bankruptcy unambiguously provided for Cannon’s surrender of his stock. We affirm.

I

This case arises out of the settlement of certain disputes between THC, the bankrupt involved in the Chapter 10 proceeding below, and certain officers and directors of THC. Following an extensive investigation of the former management of THC, the bankruptcy trustee filed an action in the bankruptcy court against these former officers and directors alleging, inter alia, breaches of fiduciary duty and negligence. Later, three class actions were filed in the United States District Court for the District of Hawaii by certain investors in THC Financial Corp., a wholly-owned subsidiary of THC. The class plaintiffs asserted violations of federal securities laws and state statutes against the directors and officers.

George Q. Cannon was a director of THC and owned 93,238 shares of THC stock. In response…