By Joseph Checkler
MANHATTAN--A judge on Thursday said creditors can vote on Hawker
Beechcraft Inc.'s plan to exit bankruptcy in the hands of a group
of hedge funds, as the aircraft maker continues to aim for a
first-quarter-2013 exit from Chapter 11.
In putting the plan in the hands of creditors, Judge Stuart M.
Bernstein of U.S. Bankruptcy Court in Manhattan overruled and
pushed back objections from several parties who argued the
so-called "disclosure statement" either didn't contain adequate
information to make an informed decision or unfairly favors certain
creditors. The disclosure statement, a plain-English version of a
bankruptcy plan that creditors must ratify, is a precursor to a
bankrupt company's plan confirmation hearing, where most
substantial objections are handled. That hearing is tentatively set
for Jan. 31, 2013.
"I'm satisfied it contains accurate information," Judge
Bernstein said.
Hawker's restructuring proposal calls for hedge-fund managers
Centerbridge Partners, Angelo, Gordon & Co., Capital Research
& Management and Bain Capital's Sankaty Advisors to exchange
$921.6 million in debt for an 81.1% equity stake in reorganized
Hawker.
Senior bondholders owed $510.2 million would get between nine
cents and 10 cents on the dollar, while subordinate debtholders
owed $308.3 million would be wiped out. Also losing out are equity
holders, including the Goldman Sachs Group Inc. (GS) private-equity
group that led an ill-advised 2007 leveraged buyout of Hawker with
Onex Partners.
Hawker filed for bankruptcy in May and embarked on both a sale
of the company and, if that were to fall through, a strategy to
exit bankruptcy as a leaner, standalone company. It eventually came
close to selling its aerospace business to China's Superior
Aviation Beijing Co., but the deal collapsed and Hawker late last
month announced the deal to come out of bankruptcy in the hands of
the hedge funds.
Hawker, of Wichita, Kan., is one of the world's largest makers
of business jets but has suffered from a prolonged slump in the
corporate jet market. Hawker lost $630 million in 2011, and
aircraft deliveries have fallen by a third over the past two
years.
The company plans to refinance a $400 million bankruptcy loan
from the hedge funds with a $530 million exit loan that would pay
off the existing lenders and fuel its emergence from Chapter 11. It
will either spin off or close its jet products line, the company
said.
(Dow Jones Daily Bankruptcy Review covers news about distressed
companies and those under bankruptcy protection. Go to
http://dbr.dowjones.com)
Write to Joseph Checkler at joseph.checkler@dowjones.com. Follow
him on Twitter at @JoeCheckler
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