Go First's insolvency plea: Central Bank of India, three other lessors move applications at NCLT

Go First

Central Bank of India and lessors such as SMBC Afro Engine Leasing, Bluesky 19 Leasing Company Limited, and Bluesky 31 Leasing Company Limited have filed new applications in Go First's insolvency plea at the National Company Law Tribunal (NCLT).

These applications, along with the applications of lessors such as Jackson Square Aviation, Engine Lease Finance B.V, and BOC Aviation, are all likely to be heard by the NCLT on June 15.

Central Bank of India, which is a part of the Committee of Creditors of Go First has moved an application under Insolvency and Bankruptcy Code, 2016 to replace the interim resolution professional and appoint a resolution professional.

On June 5, the NCLT sought the response of Go First's interim resolution professional (IRP) in applications by three lessors to exempt them from the moratorium as they had terminated their leases prior to the moratorium order.

On the same day, aircraft lessor Jackson Square Aviation Ireland Limited urged the tribunal to pass an interim order directing the IRP not to use the aircraft until the disposal of the application. Engine lessor Engine Lease Finance B.V argued that their application was for the return of engines and they wished to inspect them in the meantime.

Aircraft lessor BOC Aviation told the court that they had filed an application seeking an exemption from the insolvency process, as they had terminated leases before NCLT admitted the plea for insolvency.

The IRP argued that the aircraft are the core of Go First's business, and the company cannot be run as a going concern if the aircraft are taken away.

These applications by lessors have been filed pursuant to the National Company Law Appellate Tribunal's (NCLAT) May 22 order, which upheld Go First's insolvency and directed the lessors to file an appropriate application at the NCLT to ascertain the status of leases terminated prior to the airline being admitted to insolvency.

The appellate tribunal also granted liberty to the Interim Resolution Professional (IRP) to move an application at the NCLT with respect to the claims of both parties relating to the aircraft in question.

On May 10, the principal bench of NCLT at Delhi admitted Go First's voluntary plea to initiate an insolvency resolution process.

The tribunal appointed an IRP while suspending the board and putting a moratorium on the debt-ridden airline's financial obligations.

Founded by billionaire Nusli Wadia, Go First, formerly known as GoAir, filed for bankruptcy on May 2, blaming US engine maker Pratt & Whitney for grounding half of its fleet due to faulty engines.

The ultra-low-cost airline has liabilities worth around Rs 11,000 crore.