A bankruptcy judge sided Monday with a group of current Hawker Beechcraft customers who balked at a move by the Kansas plane maker to immediately sell off its inventory of discontinued Hawker 4000 jet aircraft at substantial discounts as part of the company's bankruptcy proceedings.
Hawker Beechcraft wants to sell the remaining inventory on "an expedited basis," without bankruptcy court approval of each sale, because it believes the value of the discontinued line of planes will continue to decline as competitors introduce new aircraft and further dilute the company's share in the business jet industry.
The Ad Hoc Committee of Hawker 4000 Customers, which is comprised of current customers, contended in a bankruptcy court filing Monday that the 20 aircraft in question normally retail at about $20 million apiece, amounting to $400 million in assets. The group objects to Beechcraft selling those planes for as little as a third of their retail value — little more than the cost of the engines and avionics.
U.S. Bankruptcy Judge Stuart Bernstein cited the committee's objection in rejecting the company's request. The judge wrote that Hawker Beechcraft failed to identity any imminent sales or how the failure to obtain an expedited hearing on their motion will affect sales.
Hawker Beechcraft filed for bankruptcy protection in May and talks to sell its operations to China's Superior Aviation Beijing Co collapsed last month. It has said it now plans to emerge from bankruptcy protection as a slimmed down company in the first quarter of 2013.
The latest legal dustup comes in the wake of a Thursday filing in which the company sought court permission to renege on warranty and support obligations related to the Hawker 4000 and Premier I and IA jets. On Friday Hawker Beechcraft filed a related motion for an order authorizing it to sell its remaining Hawker 4000 inventory without warranty or support commitments.
The current customers also argued that Hawker Beechcraft has insisted it intends to "act responsibly" in dealing with them and has assured them it is committed to developing a service and support solution for the planes they bought. They contend that if Hawker Beechcraft does that the confidence it would generate in prospective Hawker 4000 customers should help increase the value of the remaining inventory of aircraft.
"This process will require a reasonable amount of time, not an accelerated process," the committee argued in its filing. "Thus, there is simply no reason to race to sell the Hawker 4000 inventory before those efforts play out."