Commercial aviation has been one of the sectors most heavily impacted by COVID-19, but thanks to the strong controlling measures to weather the impact of the pandemic, the People’s Republic of China (the “PRC”) has been a market in which some form of aviation recovery is happening. Unfortunately, the recovery has not come soon enough for the Chinese conglomerate HNA.

Cancellation of debt a key element of most restructurings generally triggers taxable income. The German tax authorities had issued an administrative decree (the "Tax Restructuring Decree" - Sanierungserlass), however, declaring that, upon the satisfaction of certain requirements and conditioned on forfeiture of any loss carry forwards, the cancellation of debt income ("CODI") would not be taxed.