Liquidation proceedings have commenced for two Irish leasing corporations, GTLK Europe and GTLK Europe Capital, primarily owned by the Russian government. These enterprises, specialising in leasing ships and aircraft, are in the process of selling their assets, which include a variety of aircraft, through a series of sales overseen by the international aviation consulting group, IBA. Spearheading these liquidation efforts are Damien Murran and Julian Moroney from Teneo Restructuring Ireland. They’ve been tasked with reclaiming a debt of approximately $1.75 billion or €1.63 billion, owed to various western creditors.
This liquidation sale has seen six aircraft, owned by both companies, put up for sale thus far. The first sales transaction included two Boeing 737-800 aircraft, situated in the Middle East and previously rented by a budget airline. Launches for sales followed for an Airbus A321-211, previously leased to a Russian airline, and three A319-111 planes, both based in Europe.
Following an application brought forward by four creditors claiming a sum of over $175 million, the High Court made a verdict in May of the preceding year, stating these Russian state-owned leasing corporations be put into liquidation. The firms were notably impacted by sanctions enforced upon Russian business entities post Ukraine’s invasion in 2022.
GTLK Europe and GTLK Europe Capital are branches of Russia’s leading leasing business, JSC STLC. By the conclusion of 2020, these corporations collectively owned 70 aircraft and 19 sea vessels, an asset worth $4.5 billion, marking this the largest liquidation in Ireland’s history.
Assets were dispersed amongst 21 lessees across 13 countries. 30 aircraft have been successfully located by liquidators in various regions such as Spain, China, the US, and Qatar along with three Arctic cruise ships. In order to recover assets remaining in Russia, including both vessels and aircraft, liquidators have also included themselves in a case against insurers in London. The insurers have contracts covering the GTLK’s assets, worth $2.4 billion.
The liquidators expressed their ongoing commitment to collaborate with national and international regulators to establish a smooth progression for the liquidation process within the context of the sanctions protocol since their appointment by the High Court the previous year.
In the previous year, GTLK disputed the naming of liquidators, contending that under Russian law, the Moscow main company should be recognised as the lawful proprietor of the European branches’ assets. Their argument was dismissed by the High Court last December, although an appeal against the decision is currently ongoing.
Due to Dublin’s status as a global hotspot for aircraft lessors, Russian sanctions have provoked numerous litigations within the High Court. Just a few weeks ago, the court commenced a trial projected to last several months. This involves assertions by aviation leasing companies about insurers purportedly declining to offer indemnity after Russian authorities held aircraft worth billions of euros in the aftermath of their Ukraine invasion.
The proceedings have been initiated by six plaintiff groups, including the world’s number two and three leasing firms, SMBC and Avolon, in addition to BOC Aviation, CDB Aviation, NAC Aviation and Hermes. They are suing various insurers and reinsurers, amongst which are Lloyds, Chubb, AIG and Fidelis.