Bankruptcy Court Say No to Hawker Beechcraft Bonuses

When Hawker Beechcraft requested that they give executives up to $5.3 million in bonuses, the bankruptcy court they are dealing with refused the idea. They said that the plan simply rewarded employees for staying at their jobs and wasn’t worth it. The U.S. bankruptcy judge dealing with Hawker Beechcraft says that the plan set the bar too low to qualify as anything other than a “retention program for insiders.” According to a report in the Washington Post, the bonuses were supposed to be a part of a Key Employee Incentive Plan. Hawker Beecher, and airplane manufacturing company, suggested that if they provide hefty bonuses to executives they may be able to meet challenging goals and improve their work production. Yet the bankruptcy court thinks that giving away large bonuses in the event of a bankruptcy isn’t a smart idea.

The bankruptcy court believes that senior management would have earned bonus pay under the proposed incentive plan because they remained at their job. The bonuses were going to be granted whether or not the company was able to emerge from bankruptcy. The International Association of Machinist s and Aerospace Workers did not approve of the bonus plan either, and filed formal objections to it. The opposing groups argued that a company in financial disaster should not pay millions to company employees for work that they are already paid to do.

The Hawker Beechcraft Company filed for bankruptcy back in May, and courts are currently negotiating with the company and facilitating a possible sale to a partner. If you have been involved in a bankruptcy, you may be frustrated by the court’s input. Many times a bankruptcy court becomes a guidance counselor- even when you would prefer to make your own decision. Contact a bankruptcy attorney at our firm today if you need a legal advocate to communicate with the courts and help them see things your way.