(Corrects paragraph 5 to clarify that the chairman and not the
chief executive will be included in the bonus plan)
July 24 Bankrupt aircraft maker Hawker
Beechcraft Inc's plan to pay $5 million in bonuses to its top
management has drawn an objection from a U.S. bankruptcy
monitor, who said the executives need to do more than just stay
with the company during its reorganization.
U.S. Trustee Tracy Hope Davis, who represents the Justice
Department in the bankruptcy case, said in court papers that the
proposed plan appeared to be "disguised retention awards".
Hawker Beechcraft, owned by Goldman Sachs and Onex
Corp, has said the plan was necessary because the
employees have shouldered additional responsibilities without an
increase in compensation.
Davis said the plan does not outline "a set of challenging
standards" and "high hurdles" to overcome before retention
bonuses could be paid.
The employees who would receive bonuses include the
chairman, chief financial officer, general counsel and vice
presidents of human resources, global customer support and
Hawker Beechcraft filed for Chapter 11 bankruptcy in May,
unable to support a $2.5 billion debt load amid a weak market.
The Wichita, Kansas-based maker of business jets, general
aviation turboprops and military aircraft has filed a
reorganization plan that would give secured lenders at least 81
percent of the company's equity when it emerges from bankruptcy.
Hawker Beechcraft has also received court approval for talks
with Superior Aviation Beijing Co, a little-known Chinese
aerospace firm over the sale of the company for $1.79 billion.
The case is In re:Hawker Beechcraft Inc, U.S. Bankruptcy
Court, Southern District of New York, No:12-11873.
(Reporting by Tanya Agrawal in Bangalore; Editing by Ted Kerr)