Court ruling brings Insel Air closer to bankruptcy

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Court ruling brings Insel Air closer to bankruptcy

Unread post by bimjim » Thu Jan 31, 2019 ... ankruptcy/

Court ruling brings Insel Air closer to bankruptcy
Wed, Jan 30th, 2019


InterCaribbean has to provide a $500,000 bank guarantee for Insel Air, the Court in first Instance ruled on Thursday. But Insel cannot touch that money until the court has ruled in a regular procedure that the almost bankrupt airline is entitled to it.

The ruling of Thursday, January 30, makes clear that without these funds, Insel Air will be unable to pay salaries over the month of January. The dispute between interCaribbean and Insel Air heated up after Insel’s trustee Rogier van den Heuvel put a lien on the fuel in an interCaribbean plane at Princess Juliana Airport in St. Maarten on January 19. As a result, this plane is unable to depart as long as the lien is in place.

To avoid further troubles, interCaribbean canceled all its flights to St. Maarten.

On December 28 the court ruled that interCaribbean had to put up a guarantee for a bit more than $11 million to satisfy Insel Air’s creditors. Failure to do so carried a penalty of $500,000. When interCaribbean failed to put up the guarantee, the court refused to approve the agreement with Insel’s creditors and Insel Air put a lien on the fuel in an interCaribbean plane that was at the airport in St. Maarten in an attempt to secure payment of the $500,000 penalty. The value of the fuel is a bit more than $680.

That action was the straw that broke the camel’s back for interCaribbean: the company was set to take over the shares in Insel Air but now it does not want to do business with the Curacao-based airline anymore.

This latest development will almost certainly result in Insel Air’s bankruptcy. Insel Air demanded in the summary proceedings that interCaribbean lives up unconditionally to its obligation to provide a guarantee for its creditors; furthermore, that interCaribbean takes over the shares in Insel Air and that it makes planes and crew available with a capacity of 50 seats. Insel also demanded an advance of $5 million and it asked the court to impose a one-time penalty of $50 million and a 1$ million penalty for each day interCaribbean does not abide by the ruling. But the court denied all these demands.

As soon as interCaribbean provides the $500,000 bank guarantee, Insel will have to lift the lien on the fuel in the plane that is currently on the tarmac at the Princess Juliana international airport. Failure to do so carries a penalty of $100,000 per day with a maximum of $1 million.

Insel Air’s reported claim that it holds interCaribbean liable for its $120 million debt did not come up in this court procedure.

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