Court blocks incentive plan.
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.
Hawker Beechcraft's union opposed the bonus plan, as did the U.S. Justice Department's bankruptcy watchdog agency, both of which filed formal objections seeking to block it.
The company in the past has defended its plan to pay the bonuses, arguing that its managers are a “talented and capable group” with much work left to do before the company can emerge from bankruptcy.
At a hearing last month, the court approved a $1.9 million bonus plan for 31 lower management-level employees.
Hawker Beechcraft filed for bankruptcy in May. Onex Partners and GS Capital Partners, a Goldman Sachs private equity fund, currently own the company. The bankruptcy court has approved talks with China-based Superior Aviation Beijing, which has offered nearly $1.8 billion to buy Hawker Beech's business jet and general aviation operations.