Bankruptcy judge close to granting Beechcraft plan
NEW YORK (AP) — A New York bankruptcy judge made clear Thursday that he's close to signing off on a reorganization plan for Kansas aircraft-maker Hawker Beechcraft that will preserve thousands of jobs.
Judge Stuart Bernstein heard no major objections from creditors while reviewing a draft of the plan during a lengthy hearing at a federal bankruptcy court in Manhattan. He said he wanted minor changes in the wording before granting final approval.
"Assuming I don't have a problem with it, I'll approve it," Bernstein said.
Lawyers for the Wichita-based company said it expects to emerge from Chapter 11 in the second half of February, led by the same management team.
The judge also signed off on a provision to cut costs by having the Pension Benefit Guarantee Corp. take over two Hawker Beechcraft retirement plans. Also approved was a request by the company to continue the pension plan for hourly workers under an agreement reached with the machinists union that freezes pensions and creates a new retirement savings plan.
The labor provisions will allow the company "to continue to employee thousands of union and non-union workers," the judge said.
As of Dec. 31, Hawker Beechcraft employed 5,400 people companywide, including more than 3,300 at its Wichita headquarters. It remains unclear if that total will change as it emerges from bankruptcy.
Tom Buffenbarger, president of the International Association of Machinists and Aerospace Workers, said that given the financial turmoil, it was "remarkable" that the 3,000 current and laid-off workers represented by the union will still have retirement benefits.
"It is a credit to both sides of the bargaining table that workers' interests at Hawker were given the respect they deserve," he said in a statement.
The company has secured an underwriting commitment for $600 million in exit financing consisting of a term loan and revolving line of credit from JPMorgan Chase Bank and Credit Suisse.
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