Judge Delays Decision On Hawker Beechcraft Bonuses

By: KAKE News Email
By: KAKE News Email

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UPDATE: Thursday, July 26, 2012

A bankruptcy judge wants to hear more arguments before deciding whether to approve Hawker Beechcraft's request to pay eight top executives more than $5.3 million in bonuses.

But the judge did allow $1.9 million in bonuses for 31 other lower management-level employees during a hearing Thursday in New York. That's according to machinists union officials at the hearing.

The court plans to hear more arguments next month. The Wichita, Kan.-based plane maker filed for bankruptcy in May.

Union spokesman Frank Larkin says the case should be about what's best for the company, its employees and Wichita -- not a handful of executives.

The company had no immediate comment. Earlier Thursday, the company told the judge its managers were a "talented and capable group" with much work left to do before the company could emerge from bankruptcy.

UPDATE: Thursday, July 26, 2012

Hawker Beechcraft is defending its plan to pay more than $5.3 million in bonuses to eight top executives. Company officials call the executives a talented group that has much work left to do before the company can emerge from bankruptcy.

The company told the bankruptcy judge in a document filed Thursday just hours before a hearing that its executives must continue to pursue both the sale of the company to a Chinese firm and a reorganized standalone company.

Their document notes that some of the remaining work includes shutting down the company's business jet operations, which would include closing facilities and cutting the workforce under the standalone proposal.

The Justice Department's bankruptcy watchdog and the machinists union have both filed objections to the bonus plan.

UPDATE: Wednesday, July 25, 2012

The machinist union has filed an objection to a proposal that would grant a $5 million bonus for Hawker Beechcraft executives.

The International Association of Machinist and Aerospace Workers called the Key Employee Incentive Plan a lucrative bonus program.

“These executives, who already have a fiduciary duty to maximize Hawker Beechcraft's value, should not need any additional incentive to complete their most basic responsibilities,” said Ron Eldridge, IAM Aerospace Coordinator.

The aviation company said the $5.3 million bonus is an incentive award, that is consistent with its commitment to strongly emerge from bankruptcy.

The IAM also called for the motion to be denied because the KEIP failed to specify any true "incentive thresholds" as required by U.S. Bankruptcy Code.

A hearing on the proposed bonuses is set for Thursday.

Monday, July 23, 2012

The Justice Department's bankruptcy watchdog agency is fighting a move by Hawker Beechcraft to pay eight senior executives more than $5.3 million in bonuses.

In a court filing Monday, U.S. Trustee Tracy Hope Davis argues that the Kansas-based plane maker hasn't shown that its proposed bonus plan isn't a disguised retention plan.

Bonuses are allowed must include more than a reward for staying with a company.

Hawker Beechcraft calls it an incentive award and says its plans are consistent with its commitment to strongly emerge from bankruptcy.

A hearing on the proposed bonuses is set for Thursday.

The company filed for bankruptcy protection in May. The court approved exclusive talks with a Chinese firm that has offered nearly $1.8 billion to purchase the company's business jet and general aviation operations.

The Associated Press contributed to this report.

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