Bankruptcy Judge Rejects Hawker Beechcraft Bonuses

Stephen Pope

Thursday, August 30, 2012 at 08:08 PM ET

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Hawker 4000

Key Takeaways:

A bankruptcy judge rejected a $5.3 million bonus proposal for eight top Hawker Beechcraft executives, ruling it failed to meet legal standards for "challenging goals" required in bankruptcy payouts.
The judge deemed the plan merely a retention incentive, and it was actively opposed by the company's union and the U.S. Justice Department's bankruptcy watchdog.
This decision follows the approval of a smaller $1.9 million bonus plan for lower management and comes as Hawker Beechcraft, in bankruptcy since May, is discussing a potential $1.8 billion acquisition by a Chinese firm.

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A bankruptcy judge has rejected a proposal to give eight top Hawker Beechcraft executives up to $5.3 million in bonuses, ruling the plan would reward them merely for staying at their jobs.

The judge in the case said the plan amounted to retention incentives, and did not meet legal standards that require “challenging goals” before such payouts are allowed in bankruptcy proceedings.