Hawker Beechcraft files for bankruptcy

Aircraft-maker Hawker Beechcraft filed for bankruptcy protection Thursday, after reaching an agreement with its lenders that will eliminate $2.5 billion in debt.

The Wichita, Kan.-based aircraft manufacturer filed for Chapter 11 in New York as part of a restructuring deal to transfer ownership of the company to its creditors.

The company received a $400 million commitment to keep its operations going and continue paying employees, suppliers and vendors.

“We are pleased to have reached an agreement with our largest lenders and bondholders on a solution to stabilize and improve our capital structure,” Hawker Beechcraft CEO Robert Miller said in a statement.

The bankruptcy is another blow to Wichita’s aerospace industry; Boeing decided to shutter its plant there in January.

Hawker Beechcraft makes both military and commercial planes. The company has been locked in a battle with Brazilian aerospace firm Embraer and Sierra Nevada Corp. over a $355 million Light Air Support Air Force contract. The contract was awarded to Embraer and Sierra Nevada Corp. last year, before the Air Force canceled the contract and restarted the competition this year when Hawker Beechcraft sued.

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