Originally Posted by
Telfer86
Pardon my naivety but does the debt goes away when the company is liquidated & it is just a sale of hardware ?
The AOC is owned by the company so you have to buy the company to get the AOC , not my area but how can you say abbra caddabbra all debts disappear
If liquidated the debts go , but also the company goes & thus the AOC is gone
I find the amount owed to aircraft lessors incredible , nearly $ 2 000, 000, 000 or the cost of 20 A320 neos
They can't have been paying leasing costs for months or years , maybe five aircraft lessors each owed $ 400, 000 , 000
That is serious coin & not great form on the part of Virgin
How is the Airline able to fly aeroplanes around now( & incur further maintenance costs , devalue) that they don't own and have not paid lease fees on & are not currently paying any lease fees on.
Is that not a bit cheeky ?
Surely the right thing to do would be return the aircraft to their owner
This is my understanding of Admin.
1.
not my area but how can you say abbra caddabbra all debts disappear: You don't. The Administrators go to the creditors and put a proposal to them, that usually means a haircut on the debt because the company is unlikely to be a going concern. The creditors vote on the proposal and the majority of the creditors (as in majority of the debt, not numbers of voters) carry the day. From what I've read it'll be less than 10c in the $.
2. I find the amount owed to aircraft lessors incredible , nearly $ 2 000, 000, 000 or the cost of 20 A320 neos. They can't have been paying leasing costs for months or years , maybe five aircraft lessors each owed $ 400, 000 , 000: Not completely sure on this, but I believe the debt owed to the lessors is not for past use, but for the whole future of the lease agreement, so if there was 3 yrs left on an A/C lease, that debt is countered. So as I understand it the lease debt is for lease costs up to the end of the leases.
If liquidated the money received goes to the debt holders, but the unsecured debt holders (likely everyone bar the banks) are paid out AFTER the secured debt holders, so unsecured are likely to receive only Cs in the $, if anything! The AOC is still there I believe, but of what value would it be worth? The cheapest and quickest way (you'd assume) to start up would be to do a deal with the Admin and buy VA. The assets themselves in this environment would be unlikely to receive anything like book value, who'd want to buy used 737s atm; what would spares be worth, ground equipment etc? A likely Ansett style sell off which took 10 yrs and made the 2 Marks very wealthy!