A December 2012 ruling has effectively called into question the validity of engine leases in Denmark. Ruling in relation to the bankrupt regional airline Cimber Sterling, a judge in the District Court of Sønderborg ordered the trustees of the estate to return seven of the nine engines in question to the engine lessors. However, the two remaining engines, both GE CF34s valued at around USD 2 million each, were to be retained by the trustees as on the date of bankruptcy they had been affixed to the Bombardier CRJ200 aircraft for over three months.
COMMITTEE OF CONCERNED MIDWEST FLIGHT ATTENDANTS FOR FAIR AND EQUITABLE SENIORITY INTEGRATION v. INTERNATIONAL BROTHERHOOD OF TEAMSTERS AIRLINE DIVISION (November 30, 2011)
The High Court today gave the first decision, globally, of a Court of ultimate appeal on the question of the construction of Article XI(2) of the Cape Town Convention's protocol on Matters Specific to Aircraft Equipment (Aircraft Protocol), which is of seminal importance for financiers and lessors of aircraft property, insolvency administrators globally.
The Virgin sale shows the flexibility of Australia's restructuring regime and sets a significant judicial precedent for future control transactions.
Virgin Airlines restructured through voluntary administration
On 20 April 2020, Virgin Australia and a number of its subsidiaries were placed into voluntary administration owing $7 billion of debt to around 12,000 creditors with partners at Deloitte Australia being appointed as joint and several voluntary administrators of Virgin. Clayton Utz was appointed to act for the Administrators.
Insolvency termination clauses in Supply Contracts
What are the potential implications of the new measures in relation to contracts for the supply of goods or services set out in the Corporate Insolvency and Governance Act 2020 (the “Act”) for aircraft lenders, lessors and airlines? In the second of a series of three articles, we consider the new prohibition on suppliers invoking termination clauses (or changing other terms) upon an insolvency or formal restructuring process introduced in the Act.
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The British government has commenced an airline insolvency review, in the wake of recent high profile airline failures such as Monarch and Air Berlin, and on the premise that changes in the industry have outpaced protection regimes.
The review will focus on two main areas: repatriation of stranded passengers and redress for consumers. There is a desire to minimise repatriation costs falling on the public purse and ensure that consumers have clear avenues of redress.
The Full Court of the Federal Court of Australia has become the first appellate court among ratifying countries to look directly at the meaning of “give possession” and “giving possession of the aircraft object to the creditor” under the Protocol to the Convention on International Interests in Mobile Equipment (known as the Cape Town Convention) on matters specific to Aircraft Equipment (the Protocol) in the context of an insolvency (the Virgin Australia insolvency) in Wells Fargo Trust Company, National Association (trustee) v VB Leaseco Pty Ltd (admin
Following the collapse of Monarch and Air Berlin last year, the International Air Transport Association ("IATA") has suggested that bankruptcy laws should be reviewed globally in order to allow a “reasonable timeframe” for airlines to continue operating after entering insolvency to allow more passengers to complete their journeys.
If you are an aviation professional in the COVID-19 era, you are likely learning about, or reacquainting yourself with, the restructuring process.
On Friday, March 27, 2020, the U.S. House of Representatives voted to approve the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) submitted by the Senate and President Trump just signed the bill. The bill provides for $2.2 trillion in emergency aid to ease the financial impact of the COVID-19 crisis.