Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comFirm Insights
Beechcraft Emerges From Chapter 11 Bankruptcy
Author: Joel R. Glucksman
Date: February 28, 2013
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Aircraft maker Beechcraft, formerly known as Hawker Beechcraft, has officially emerged from Chapter 11 bankruptcy and is prepared to focus solely on its military sector and turboprop and piston aircraft.
The Kansas-based company is already competing for a $354 million government contract to build aircraft for use in Afghanistan, the value of which could exceed $1 billion, according to The Associated Press. Analysts say that securing the contract and mass producing its single-engine turboprop are crucial to the company if it plans to reach high levels of profitability in the coming years. Although the single-engine turboprop is not in production as of yet, CEO Bill Boisture recently told the AP that constructing this plane is a pivotal goal for the year.
“We have good prospects for that happening,” Boisture said in the interview. “If the LAS contract is not awarded, or we don’t win for some reason, we would have to take some small, interim steps until we have achieved a launch customer. But we will go forward with the program.”
Although the project appears lucrative, significant cutbacks in defense spending may threaten the company’s ability to expand its military focus and build a profitable customer base.
The company filed for protection under bankruptcy law in May 2012, and has since shed its unprofitable business sectors, including its business jet and manufacturing industries. Since exiting bankruptcy, the company has retained 5,400 employees and noted that it plans to maintain its existing workforce into the future. In addition, the company said it plans to build up its sales network and demonstrate to competitors and prospective clients that it’s financially sound and innovative. Following its formal exit from bankruptcy, Beechcraft shed most of its debt and obtained $600 million in exit financing.
- Practices: Bankruptcy & Creditors' Rights, Corporate Transactions & Business, Bankruptcy Litigation
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