Go First, the third-largest airline in India, has been granted bankruptcy protection by the New Delhi bench of the National Company Law Tribunal (NCLT).
The move has given the carrier a chance of survival and appointed Abhilash Lal of Alvarez & Marsal as the interim resolution professional to take over the management and board of Go First.
The suspended board has been directed to cooperate with Lal to ensure there are no employee layoffs.
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A moratorium on the carrier’s assets and leases has also been ordered.
The NCLT has also prohibited the recovery of any property by an owner or lessor where the property is occupied by or in the possession of the corporate debtor.
This order will prevent 45 aircraft from being taken back at least for six months for which lessors had filed repossession applications with the DGCA.
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The airline had blamed US engine maker Pratt & Whitney for its financial crisis, which led it to file for bankruptcy protection and subsequently cancel all its flights.
It is not yet known when and if the airline will start flying again, and with what fleet size.
Go First is said to be planning to resume flights on May 24 with a reduced fleet of 23 planes, but nothing has been confirmed.
The resolution professional will have to call for claims from creditors for the purpose of constituting the committee of creditors and ensuring that the company remains a going concern.
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The NCLT has asked the management to deposit Rs 5 crore for immediate expenses.
Go First had won an arbitration case against Pratt & Whitney in Singapore that ordered the American firm to supply spare engines to the airline, but the latter had failed to comply with it.
Subsequently, it initiated enforcement proceedings against Pratt & Whitney in a Delaware court as well as in other relevant jurisdictions. Pratt & Whitney plans to oppose the move, according to a Delaware court filing seen by Reuters.
NCLT has directed the resolution professional to take all necessary steps, including the execution of the arbitral award, to keep Go First as a going concern and run its services smoothly.
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