The U.S. Bankruptcy Court in New York deferred a ruling on a highly controversial proposal to pay more than $5.3 million in bonuses to eight top executives at Hawker Beechcraft. At the conclusion of a three-hour hearing last week, Judge Stuart Bernstein said he needed more information before ruling on the bonus request, which was opposed by the IAM and the U.S. Justice Department as excessive, unnecessary and a violation of the Bankruptcy Code.
In its filing opposing the proposal, the IAM noted the “complete irony and hypocrisy” of a motion seeking to provide millions in bonuses for executives at a company struggling to survive.
“The attempt to implement such a lucrative bonus program for the very executives who led Hawker Beechcraft into bankruptcy is particularly outrageous after thousands of Hawker employees have already lost their jobs and thousands more could lose jobs and pension benefits,” said IAM Aerospace Coordinator Ron Eldridge.
Hawker claims its executives are “talented and capable group” with much work left to do before the company can emerge from bankruptcy, including possible closing of facilities, cutting the workforce and “resolving” the fate of employees’ pension plans.
The U.S. Justice Department’s trustee agency is also opposed Hawker’s bonus proposal, calling it a “disguised retention plan” that fails to meet required benchmarks of “challenging standards” or “high hurdles” to overcome before bonuses can be paid.