Hawker Beechcraft is proposing to pay Swiss plane-maker Pilatus Aircraft $7.5 million to settle a dispute over Hawker Beechcraft’s production of the T-6/AT-6 military trainer.

Hawker Beechcraft says the move is neither an admission that it is using the “protectable intellectual property” of Pilatus, nor an acknowledgement that it owes royalty payments. But Hawker Beechcraft says the proposed payment would be in its best interest because it would avoid a public dispute and prolonged lawsuit at a critical juncture of the company’s bankruptcy proceedings.

Pilatus Aircraft last summer filed a claim with a bankruptcy court alleging that Hawker Beechcraft was using its intellectual property for the production of the T-6/AT-6 military trainer and should be required to pay continued royalties. Hawker Beechcraft disputed the claim, saying that it had fully paid the initial agreement regarding the license to use certain intellectual property and subsequent payments were not tied to the use of intellectual property, “but rather a complex settlement of a number of commercial disputes between the parties.”

Based on the Pilatus PC-9, the T-6/AT-6 trainers have been used as the platform for the U.S. Air Force/Navy Joint Primary Aircraft Training System contract, along with a number of international programs. The aircraft is also Hawker Beechcraft’s platform for the U.S. Air Force’s Light Air Support (LAS) program competition.

The proposal for a “cure” payment to Pilatus comes as Hawker Beechcraft seeks final creditor approval to emerge from Chapter 11 bankruptcy protection. The company is hoping to formally exit bankruptcy next month.

But it also comes as the Air Force is in the throes of a final decision on LAS. The decision was initially targeted for this month, but has been pushed off until February.