Hawker Beechcraft Seeks $5 Million in Executive Bonuses amidst Bankruptcy

Kansas-based Hawker Beechcraft, which manufactures aircraft recently asked that they be given permission to pay executive $5 million in bonuses, and if approved would leave employees in the lurch and the taxpayers on the hook.

Hawker alleges that the bonuses are an incentive for executives, who stay with the company during the bankruptcy process. But representatives for the machinist union and bankruptcy watchdogs plan to challenge the bonuses.

When Hawker Beechcraft filed for bankruptcy this past May they left the employee pension fund $751 million in the red, and is seeking to drop the pension plans altogether. The aircraft company recently negotiated a sale to a Chinese aviation company, and the new owners don’t want to pay the pensions. If they refuse to pay, the funds will come out of the taxpayer’s pocket through a federal program, Pension Benefit Guaranty Program.

Bankruptcy attorneys recognize it is important to compensate employees as they help get a business through a debt-relief plan. Many companies get court approval to pay incentives but U.S. Trustee Tracy Hope Davis says Hawker must meet “challenging standards” to satisfy creditors before they can justify executive bonuses, something she asserts the company has failed to do.

Regardless of the debt-relief plan a business or individual enters whether it is Chapter 7, Chapter 11, or Chapter 13, they will need bankruptcy lawyer to guide them through the entire process. The bankrupt individual or company has to meet many filing requirements, and develop repayment plans that will make creditors happy.

With the assistance of a bankruptcy attorney, the debtor will be able to move through the process quickly with minimal troubles, allowing them to emerge in a healthier financial state.