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Hawker Beechcraft's bankruptcy puts other case on hold

Filing for bankruptcy is a difficult decision for business owners, and Tennessee residents considering such proceedings should be fully aware of their rights and responsibilities under the law. If a company files for commercial bankruptcy, there may be additional legal actions required if the company is involved in other pending court cases.

Business owners in Cleveland will be interested in the case of aerospace manufacturer Hawker Beechcraft. The company filed for bankruptcy in May, and that means other court proceedings involving the company were halted.

However, a litigant who is owed money by a company can ask the bankruptcy court to rule that the owed money isn't dischargeable, and that is what happened recently with Hawker Beechcraft.

The corporation is still involved in a lawsuit that was initiated five years ago. That litigation is based on the False Claims Act, and it was brought against Hawker Beechcraft by people formerly employed by a subcontractor of the company. The plaintiffs claim that Hawker Beechcraft is responsible for false statements regarding aircraft sold to the U.S. military.

The five-year lawsuit is currently under the jurisdiction of a federal court in Kansas, while Hawker Beechcraft's bankruptcy was filed in New York. The older proceedings are now at a standstill while the courts determine whether the plaintiffs' claims in the Kansas case will be impacted by the company's bankruptcy filing.

For Tennessee business owners considering bankruptcy, the prospect can initially seem overwhelming. A wide variety of issues may come into play in commercial bankruptcy, so it is important for business owners to consult with an attorney who is fluent in bankruptcy law and familiar with the reorganization process.

Source: The Topeka Capital-Journal, "Old claims follow Hawker Beechcraft in Bankruptcy," Sept. 29, 2012

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