In re Hawker Beechcraft

U.S. BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
Bankruptcy

New York Law Journal

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Bankruptcy Judge Stuart Bernstein

Hawker Beechcraft's predecessor Beech Aircraft and Switzerland's Pilatus Aircraft competed jointly on a government contract to supply the U.S. Air Force and Navy with aircraft for the Joint Primary Aircraft Training System (JPATS). Pilatus provided Beech with its PC-9 trainers, plans, drawings and design engineers to enable Beech's creation of the T-6 trainer. Beech agreed to pay Pilatus royalties, including those on "derivative aircraft" sold for the JPATS program and internationally. A 2000 compact clarified Pilatus' right to compete against the T-6 internationally without affecting royalties. Pilatus moved to compel Hawker's assumption or rejection of their 2004 agreement related to Hawker's use of its intellectual property. Analyzing the 12 factors in In re Adelphia Communications, the court held Hawker must decide to assume or reject the 2004 agreement by Jan. 7, 2013. Hawker already had a reasonable amount of time to decide on the agreement's assumption. Further, Hawker's right to make the T-6 trainer should be determined at the earliest possible date, such that Adelphia's "nature of interests at stake" and "good to be achieved" factors favored compelling the debtors to make the assumption/rejection decision on a specified date.

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