Irish aviation firm to be wound down over €13.4m loan
Posted on 1st April 2019 at 21:17
US aircraft lessor CAF claims Peel Aviation has not repaid loan for purchase of luxury jet
A High Court judge has ordered the winding-up an Irish aviation leasing consulting company over alleged non-payment of a multimillion-dollar loan relating to the purchase of a luxury jet later used by former Indian Premier League boss Lalit Modi to fly around India.
A stay applies until Tuesday on the winding-up order to allow for the filing of an affidavit by the appointed liquidator, Shane McCarthy of KPMG.
Ms Justice Miriam O’Regan was told on Monday the 13-seater Bombardier Challenger 300 was purchased with a loan facility of over $15 million (€13.4 million) 11 years ago, and has been kept at a warehouse at Biggin Hill Airport outside London for the last nine years.
Corporate Aircraft Funding Company LLC (CAF), with an address at Avenue of the Americas, New York, has filed a petition seeking the winding-up of Peel Aviation Ltd with a registered office at Furry Park Road, Dublin 5.
CAF claims it is owed more than $14 million, made up of the principal sum of $12 million and about $2.5 million for storage and maintenance of Peel Aviation’s only asset, the aeroplane.
Stephen Walsh BL, for CAF, said it appeared the plane is now being kept at an airfield outside London and was used for a time by former Indian Premier League cricket boss Modi.
In its petition, CAF said Peel Aviation was established for the purpose of carrying on the businesses of aviation leasing consultants and leasing advisors on all matters in relation to aviation and related businesses.
It said a $15.5 million loan facility had been advanced to Peel Aviation as part funding of its purchase of a One Bombardier Challenger 300 aircraft in 2008.
Peel Aviation’s obligation under the loan agreement were to be secured by way of a mortgage over Peel Aviation’s interest in the aircraft and engines, it was stated.
It was claimed the last payment received in relation to the loan was in 2016.
As of February 28th, 2019, the total sum of $12.1 million was owing, along with the storage and administration charges in the region of $2.5 million.
The aircraft, it is claimed, is owned by Peel Aviation, is registered with the Indian Aviation Authority and has also been the subject of court proceedings in India.
It is claimed Peel Aviation entered in 2008 into a lease agreement with Golden Wings Pvt Ltd, registered in India, and the import of the aircraft to India was sanctioned.
When importing the aircraft, it is claimed a customs duty exemption was claimed in relation to planes used for non-scheduled air transport services.
It is claimed that, in 2010, the director general of civil aviation (DGCA) in India decided after certain investigations the plane was being used for other than non-scheduled air transport services and was allegedly being used for the personal use of Mr Modi.
The Supreme Court of India later held the DGCA could exercise jurisdiction regarding the de-registration of the aircraft notwithstanding its physical location in the UK.
In October 2013, the DGCA recorded the plane was liable to be confiscated and refused to de-register the aircraft on public interest grounds, it was stated.
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