Many in New Jersey may be aware that when a company experiences a financial difficulty, employees can become concerned about the long-term effects on their employment and benefits. When the fiscal problems reach a point where the company faces a commercial bankruptcy, those employee concerns can seem justified. This may be why some of the employees of a large airplane manufacturer recently voted to make changes to their previously negotiated pension plan.
The employees of Hawker Beechcraft voted to approve a plan that, if approved by the bankruptcy court, would freeze future accruals of the retirement program in place. This was the latest move in the commercial bankruptcy of the company that is owned by Onex Partners and GS Capital partners. The company has also reported that they have a potential buyer, Superior Aviation Beijing Co.
In addition to the changes in the retirement programs, the court must also approve the purchase of the company. Not all of a company’s requests in bankruptcy are approved. In this case, a plan to pay eight top executives $5.3 million in bonuses was rejected by the bankruptcy court. The court held that the bonuses, if paid, would essentially provide additional compensation to the executives simply for staying at their jobs during the commercial bankruptcy. However, the bankruptcy court did approve payment of smaller bonuses to lower-level management employees recently.
As employees of businesses in New Jersey may have found during the recent recession, even the most stable appearing companies can be subject to the need for debt protection. Though there may be changes for employees under bankruptcy, the business and the court can often work together to find a suitable solution for everyone involved.
Source: The Washington Post, “Bankruptcy judge nixes plan for $5.3 million in bonuses for 8 top Hawker Beechcraft executives,” Aug. 24, 2012