Judge sets hearing date on Hawker Beechcraft deal
07/11/2012 5:00 AM
08/08/2014 10:11 AM
A bankruptcy judge in New York has granted Hawker Beechcraft’s request to fast-track a hearing over the Kansas planemaker’s plan to enter exclusive negotiations with a Chinese firm.
U.S. Bankruptcy Judge Stuart Bernstein on Wednesday set Tuesday for the proceedings.
The move comes a day after Hawker filed documents seeking authorization to spend 45 days exclusively negotiating with Superior Aviation Beijing Co., Ltd., to finalize the deal.
The filing included a letter from Superior outlining its $1.79 million bid to acquire on a debt-free basis all of Hawker’s assets, except its defense business. Superior would not assume any pension liabilities.
What will happen to workers’ and retirees’ pensions as Hawker Beechcraft proceeds through bankruptcy is among the many unknowns for the company and its employees. After it filed for bankruptcy in May, Hawker Beechcraft warned that it might have to terminate its defined benefit pension plans.
The company’s pension plans could be taken over by the Pension Benefit Guaranty Corp., a federal agency that pays benefits when an employer is no longer able to meet pension obligations. However, such a takeover is not guaranteed and there are caps associated with the amounts the federal agency will pay.
The PBGC’s priority is to work with companies to keep their pensions going, PBGC’s director of communications, J. Jioni Palmer, said in a statement in May after Hawker Beechcraft filed for bankruptcy. At the time, collectively, Hawker Beechcraft’s three pension plans were 56 percent funded, with $769 million in assets to cover $1.4 billion in anticipated obligations.
As part of Hawker Beechcraft’s deal with Superior, the Chinese firm also agreed to pay up to $50 million during the negotiations to maintain product lines Hawker would otherwise discontinue but for Superior’s interest in acquiring them.
In statements made earlier this week, Hawker Beechcraft has said that Superior intended to maintain the company’s headquarters and workforce in Wichita.
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