Court Issues Ruling On Hawker Beech Support Agreements

 - January 30, 2013, 12:40 PM

In ruling on a request by Hawker Beechcraft to “reject certain [warranty support] agreements related to the Hawker 4000 and Premier I and IA,” bankruptcy court judge Stuart Bernstein decided last week to grant the motion in part, and deny it in part. Six entities had filed objections to the request by the Wichita-based OEM, pointing out that Hawker Beechcraft had in its original filing for bankruptcy stated its intent to “continue certain customer programs, including the limited warranty and the Support Plus programs.”

The company subsequently filed a motion to reject parts of the sales agreements that impose continuing warranty and support obligations.

In his ruling, Bernstein granted Hawker Beechcraft’s rejection motion with respect to the aircraft purchase agreements and Support Plus agreements pertaining to the Hawker 4000 and Premier models.

However, he denied the rejection motion with respect to “any other customer programs because Hawker has failed to show that the relevant agreements are executory.” Courts have in general defined an “executor contract” as one “under which the obligation of both the bankrupt and the other partner to the contract are so far unperformed that the failure of either to complete performance would constitute a material breach, excusing the performance of the other.”

No date has been set for an additional hearing in the matter.