Guide to airline insolvency—insolvency proceedings, receivership and schemes of arrangement
Produced in partnership with Mark Craggs of Norton Rose Fulbright
Guide to airline insolvency—insolvency proceedings, receivership and schemes of arrangement

The following Restructuring & Insolvency practice note produced in partnership with Mark Craggs of Norton Rose Fulbright provides comprehensive and up to date legal information covering:

  • Guide to airline insolvency—insolvency proceedings, receivership and schemes of arrangement
  • Insolvency proceedings
  • Administration
  • Moratorium
  • The Cape Town Convention
  • Liquidation and receivership
  • Common issues that arise on insolvency
  • Security deposits and maintenance reserves
  • Possessory interests—liens and powers of detention
  • Claw-back/avoidance risk
  • More...

Guide to airline insolvency—insolvency proceedings, receivership and schemes of arrangement

This Practice Note forms part of a set of Practice Notes on airline insolvency, for further information, see Practice Notes:

  1. Guide to airline insolvency—introduction

  2. Guide to airline insolvency—international considerations and implications for office-holders

Insolvency proceedings

The commencement of insolvency proceedings with respect to an airline can mean different things from the perspective of a financier, depending on the type of proceedings and how they have been instituted. The types of insolvency proceedings most commonly encountered in the context of airline insolvencies in the UK are administration, liquidation and receivership (although strictly the latter is a contractual remedy rather than a formal insolvency procedure). Following the enactment of the Corporate Insolvency and Governance Act 2020 (CIGA 2020), it is possible for companies to enter into a free-standing moratorium process to afford limited protection from certain creditor claims and enforcement actions. There have been no instances to date of an airline entering into a moratorium.

The adoption in 2015 by the UK of the Cape Town Convention represents a substantial concession in favour of secured creditors seeking repossession of ‘aircraft objects’ (broadly, qualifying airframes and aircraft engines) in cases where the Convention applies, the most important change being the disapplication in certain circumstances of the restrictions on enforcement which ordinarily apply in administration and the new moratorium process (as to

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