Tuesday 12 December 2017

Information on Aer Arann fed to British courts was 'incorrect'

Ray Managh

Incorrect information was fed to courts in other jurisdictions relating to the insolvency of Aer Arann, it was revealed in the High Court yesterday.

Ms Justice Finlay Geoghegan expressed concern about letters that had been sent to courts in Scotland, England, the Isle of Man and Northern Ireland asking that Aer Arann's aircraft not be seized by creditors in those jurisdictions.

She told barrister Declan Murphy, counsel for the airline, that at the hearing in which Michael McAteer of Grant Thornton was appointed as interim examiner, requests had been made to permit the sending of letters requesting judicial assistance from elsewhere.

The judge said that despite protection of the High Court only having begun, a letter had been sent out stating the company had been put in examinership and an examiner had been appointed.

"That wasn't correct," Ms Justice Geoghegan said. She said the application made on August 26 last had been for the appointment of an interim examiner.

The judge made a declaration that yesterday's application in the High Court was the main insolvency proceedings and said she was concerned that the letter that had emanated from the earlier High Court proceedings had stated the company had been placed in examinership.

She said she would not wish such a statement to be made in the future.

After Mr McAteer had been appointed interim examiner on August 26, the judge then hearing the application, Ms Justice Maureen Clark, agreed to the company's request to send letters requesting judicial assistance to the British courts asking that Aer Arann's aircraft not be seized by anyone owed money by the airline during the examinership period.

Ms Justice Geoghegan confirmed Mr McAteer as examiner after considering reports to the effect that the company had a reasonable prospect of survival if certain measures were taken. Mr McAteer, in his interim examiner's report, stated that a number of investors were interested in investing in the company.

Mr Murphy told the court that Comhfhorbairt Gallimh, the company that operates Aer Arann, employed more than 300 people and it was in the interests of both creditors and employees that a Scheme of Arrangement be set up to protect the company.

He said that despite making a profit of more than €4.4m in 2007, the airline, which leased 13 aircraft, had lost about €6m in each of the three years since.

While it had implemented cost-saving measures and was acting as a franchisee of Aer Lingus, the airline had been hampered by the global downturn and significant losses incurred when flights were grounded due to the volcanic ash clouds from Iceland.

The court heard that creditors included AIB, which was owed €3.9m, the Revenue Commissioners, Dublin Airport Authority, Aer Lingus and the Irish Aviation Authority.

Barrister Rossa Fanning, counsel for the examiner, said Mr McAteer had to report again to the court within 35 days. He was granted an extension until October 11 to present the examiner's next report.

Irish Independent

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