Go First Crisis: NCLAT Reserves Order On Appeal By Lessors For May 22

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Go First Crisis: NCLAT Reserves Order On Appeal By Lessors For May 22

| Updated: May 16, 2023 16:08

The National Company Law Appellate Tribunal in the matter of Go First Airline has reserved its verdict regarding the appeal filed by three lessors opposing the NCLT’s order imposing an interim moratorium and initiating insolvency resolution proceedings.

A bench of the National Company Law Appellate Tribunal (NCLAT) Court headed by Justice Ashok Bhushan on Monday evening reserved the verdict for May 22.

“We are reserving the judgement for May 22,” Justice Bhushan-led bench of the NCLAT said.

Three Go First lessors—SMBC Aviation Capital Ltd, SFV Aircraft Holdings, and GY Aviation Lease Court Ltd—filed an appeal against Go First’s voluntary insolvency resolution proceedings before the NCLAT Court.

The lessors were contesting the NCLT ruling that had sided with Go First and approved an interim moratorium and Interim Resolution Professional (IPR).

The Go First lessors’ demand for a stay on the bankruptcy court’s judgement permitting the low-cost airline to file for voluntary insolvency was deferred by NCLAT from Friday to Monday.

Go First’s plea for voluntary insolvency was accepted by the NCLT on May 10 and the beginning of the Corporate Insolvency Resolution Process (CIRP) proceedings was authorised. Go First is now protected by a moratorium against recovery by lessors and lenders because of a ruling by NCLT.

NCLT, in its order, said: “We admit the plea of Go Airlines for insolvency proceedings. It said that we appoint Abhilash Lal as IRP (insolvency resolution professional).”

“The suspended board of directors will cooperate with the IRP. Suspended directors are also ordered to deposit ₹ 5 crore to make the immediate expenses,” the order stated.

Due to operational concerns, the budget airline also cancelled all of its flights until May 19: “Go First flights until May 19th 2023 are cancelled. We apologise for the inconvenience caused and request customers.”

Pratt and Whitney (P-W), a US-based manufacturer of commercial aircraft, has disputed the budget airline’s assertion that P-W is to blame for the company’s financial predicament and bankruptcy.

“Go First’s allegations that Pratt and Whitney is responsible for its financial condition are without merit. Pratt and Whitney will vigorously defend itself against Go’s claims, and is pursuing its own legal recourse,” Pratt and Whitney spokesperson said.

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