Hawaiian Telcom Communications filed for bankruptcy protection Monday, a black eye for buyout firm Carlyle Group and another blow to the reeling world of private equity investing.

Carlyle bought Hawaii's largest telephone carrier from Verizon Communications in 2005 for $1.6bn (€1.3bn), putting up $425m in equity and using debt to finance the rest. Carlyle stocked the board with a team of telecom experts, including William Kennard, former chairman of the Federal Communications Commission, and former Nextel Communications. Chief executive Daniel Akerson.