Blue Air, between insolvency and preventive agreement
Update 6 July 2020: The solution in brief: Admits the request of the debtor BLUE AIR AVIATION SA. Pursuant to art.23 paragraph 1 of Law no.85 / 2014, regarding the insolvency prevention and insolvency procedures, it opens the preventive composition procedure of the debtor BLUE AIR AVIATION SA. Pursuant to art. 23 par. 2 of the law appoints a temporary contractor on KPMG RESTRUCTURING SPRL. Enforceable. With the right to appeal within 7 days from the communication. The appeal request will be submitted to the Bucharest Tribunal, civil section VII. Judged in the council chamber and pronounced in public session, today, 06.07.2020.
Document: Final conclusion (divestment) 06.07.2020
Blue air is facing major financial problems, a legacy inherited from the COVID-19 crisis. The current government's promise to allocate 65 million for Blue Air has remained at the promise stage, and Blue Air is making every effort to resume commercial flights and ensure the turnover of cash flow to save itself from bankruptcy.
Blue Air applied for preventive concordat
In order to save, Blue Air submitted to the Bucharest Tribunal the documents for preventive agreement - a mechanism to safeguard the companies financially affected by Covid-19.
Today, at 10:00, it will be determined whether the preventive agreement will be applied or the company will claim its insolvency.
What is the preventive arrangement and what does it entail?
The precautionary agreement is a contract concluded between the debtor in financial difficulty, on the one hand, and creditors who hold at least 75% of the value of accepted and uncontested claims, on the other hand, approved by the syndic judge, contract by which the debtor proposes a plan recovery and realization of the claims of these creditors, and the creditors agree to support the debtor's efforts to overcome the difficulty in which they find themselves. The debtor must inform his creditors in advance that he is having difficulties and ask them for a chance to recover, proposing a concrete plan in this regard. Any debtor can resort to this mechanism, with certain exceptions provided by law, such as criminal acts or if the debtor has previously benefited from a failed preventive agreement, etc. Opening the procedure
Preventive concordat is a procedure exclusively available to debtors who can submit to the competent court a request to open the precautionary concordat procedure in which they will expose the financial difficulty in which the company is and, possibly, an expertise, an audit report, a report of the censors or a decision of the general assembly to ascertain and explain the situation, in order to facilitate the syndic judge the task of assessing the appearance of the financial difficulty.
The legal provisions allow the opening of the concordat procedure and the appointment of the concordat administrator in a short term (2-3 days).
We return with information!