California billionaire Ron Burkle's $100 million bid to acquire Aloha Airlines moved forward despite an alternative plan from a group that includes former Hawaiian Airlines Chief Executive Officer Bruce Nobles.

U.S. Bankruptcy Judge Robert Faris yesterday approved a request by Aloha to provide protections in the form of a $3 million "breakup fee" for Burkle's Yucaipa Companies and Los Angeles-based Aloha Airlines Investment Group, which is headed by former professional football star Willie Gault. The breakup fee would allow Burkle's group to recoup some of its costs if their deal falls apart.

But Faris left open a "side door" for the Washington, D.C.-based investment firm Perseus LLC to provide an alternative bid for the airline. Perseus, which plans to hire Nobles as chief executive if it acquires Aloha, valued its deal at $120 million.

"It's like a pie-eating contest where the prize is a giant pie," Faris said.

"We've gotten this far and now it gets interesting."

Faris scheduled hearings for Nov. 28-29 to review Aloha's reorganization plan.

David Banmiller, Aloha's chief executive officer, said yesterday that he was pleased with Faris' rulings and was "ecstatic" with the direction Aloha is taking with the Yucaipa group.

Last week, Aloha said it signed a letter of intent with Yucaipa and AAIG to acquire a majority stake in the company, in a deal that would allow the state's second largest airline to emerge from bankruptcy by the end of the year.

Banmiller said he believes that Yucaipa's plan offers "the better approach" for exiting bankruptcy and satisfies the interests of a broader range of Aloha's stakeholders, including its creditors and labor unions.

Banmiller said Yucaipa, which invested in Food4Less and Ralph's Grocery Co. chains, doesn't have a "rape and pillage" attitude when it comes to dealing with unions. While it's difficult to say whether wage cuts will be part of the airline's reorganization plan, Banmiller said, the company is in active discussions with labor on workplace rules and benefits.

"This may be the biggest step we've taken since we filed for bankruptcy on Dec. 30," said Banmiller.

Perseus, which manages more than $2 billion in assets and has taken part in turnarounds at Converse Inc. and Raleigh Cycle Corp., believes it offers a better plan for bringing Aloha out of bankruptcy.

Perseus said it will pay off $65 million in loans that Aloha owes to Ableco Finance LLC and Goldman Sachs Credit Partners LP and will invest $41 million to finance the airline's operations.

Perseus said it also will provide another $9 million to pay off creditors.

The investment firm, whose team also includes former U.S. Ambassador Richard Holbrooke, said its interest in Aloha was the result of discussions it had with Nobles, who was part of a previous effort headed by New York-based Matlin Patterson Global Advisers LLC to acquire Aloha.

"We believe that our proposal is in the best interest of Aloha and its various constituencies," Perseus executive Christopher O'Brien said in a Sept. 1 letter to Banmiller.

Reach Rick Daysog at rdaysog@honoluluadvertiser.com.