Air Australia has hit the news recently due to the appointment of voluntary administrators to the airline and the consequences this has had on the business, its customers, suppliers and staff.
Whilst Air Australia is not a franchise, it still offers a good case study for examining financial distress in the operation of a business and considering options that may be available.
This update considers what are indicators of financial distress and offers tips both for franchisors and franchisees in assessing developing situations and options for moving forward.
If an international airline that is a member of the International Air Transport Association (“IATA”) goes into insolvent external administration under the Australian Corporations Act 2001 (Cth) (the “Act”), will the IATA Clearing House Regulations (effective January 1, 2006) (the “CH Regulations”) continue to govern the relationship between IATA, the insolvent airline, and the other members of IATA? A recent judgment of Australia’s High Court clarifies these issues.
Introduction
As extensively released in the press, the Brazilian air carrier Oceanair – Linhas Aéreas Ltda. (known as ‘Avianca’) filed for judicial reorganization, which is a debtorin-possession court supervised reorganization proceeding authorized under the Federal Law nr. 11,101 (‘Bankruptcy Law’).
Introduction
Introduction
This article was updated on Jan. 9, 2020.
Q: We've heard about the expiration of the “grandfather clause” (in French, clause grand-père) in the Cape Town Convention, whereby pre-existing rights and interests or their priorities in a State before the effective date of the Cape Town Convention in that State shall not be affected by the Cape Town Convention. We would like to know more details about:
1. Which article in the Cape Town Convention prescribes this rule?
2. Is this rule applicable in Canada?
Background
In 2009, the Calgary Airport Authority (CAA) entered into a construction agreement with Iona Contractors Ltd. for Iona to improve CAA’s north airfield. By October 2010, the work was substantially complete; however CAA withheld further payment to Iona on the basis that some of Iona’s subcontractors remained unpaid. Iona assigned into bankruptcy and a dispute arose over the entitlement to the withheld amounts (the Funds).