LITTLE ROCK — U.S. Bankruptcy Judge Stuart Bernstein on Tuesday ruled that Hawker Beechcraft can sell its remaining Hawker 4000 super-midsize jets “as is where is,” with no warranties or assurance of parts availability.
Bernstein, of the Southern District of New York, reversed without explanation his Nov. 19 ruling that the Wichita, Kan.-based plane-maker could not sell the jets at a heavily discounted price.
Hawker Beechcraft filed for bankruptcy protection in May and later failed to finalize a $1.79 billion sale to a Chinese company.
After that, Hawker said it intended to emerge from restructuring as a stand-alone company, making only propeller planes like its King Air turboprop.
Hawker said it needs to sell the jets, most of them still new, because of their dwindling value as the company works its way through Chapter 11 restructuring, which Hawker is seeking to complete by Jan. 31.
The question is: Who would buy the planes for even a fraction of their retail price of $23.5 million when there are questions about parts or repairs availability?
“That’s a tough sell,” said Richard Aboulafia, analyst with the Teal Group of Fairfax, Va. “Obviously, there’s a price point where it becomes an irresistible jet, given the range and cabin.”
Possibly fractional ownership and working deals with vendors for the avionics and engines could work, “but even then those things will be on borrowed time, given that there is no product support.”
Hawker delivered its first 4000 in 2008 and through the third quarter it had delivered 57, Aboulafia said.
According to court records, there are 13 new 4000s somewhere in the company’s system, which includes a completions center at Little Rock where jets are finished to customer specifications.
Additionally, there are three “in-production” 4000s and four used ones, records show.
The company has shed about 270 jobs at its Little Rock facilities, which in addition to the completions center includes an aircraft service center that is one of three that the company is closing.
Hawker had no comment Tuesday about the ruling.
A group of Hawker 4000 owners filed a motion last month opposing the sale of the jets, but Bernstein did not address that in his three-page ruling.
The company said in one of its filings that it has had “numerous inquiries” about what it called “the most advanced super-midsized business jet in the world.”
Privately held Hawker is owned by Goldman Sachs Group Inc. and Onex Corp. Carrying a heavy debt load, it has registered net losses over the past two years of more than $900 million because of declining sales.
Business, Pages 25 on 12/12/2012