Irish aviation leasing firm to be wound up over alleged non-payment of multi-million dollar loan

Irish aviation leasing firm to be wound up over alleged non-payment of multi-million dollar loan

A High Court judge has ordered the winding up an Irish aviation leasing consulting company over the alleged non-payment of a multi-million dollar loan owed in relation to the purchase of a luxury jet which the court heard was later used by former Indian Premier League boss Lalit Modi to fly around that country.

The 13-seater Bombardier Challenger 300 was purchased with a loan facility of more than US$15m 11 years ago, the High Court heard and has been kept at a warehouse at Biggin Hill Airport outside London for the last nine years.

According to the petition filed by Corporate Aircraft Funding Company LLC with an address at Avenue of the Americas, New York, seeking to have Peel Aviation Ltd with a registered office at Furry Park Road, Dublin 5, wound up, it is claimed the indebtedness to it was in the sum of more than US$14m, made of the principal sum of US$12m and about $US2.5m expended in relation to the storage, maintenance of the Peel Aviation's only asset, the aeroplane.

Stephen Walsh BL told the court it appeared the plane is now being kept at an airfield outside London and was used for a time by the former Indian Premier League boss Lalit Modi.

Corporate Aircraft Funding Company LLC with an address at Avenue of the Americas, New York, brought the High Court petition to have Peel Aviation Ltd with an address at Furry Park Road, Dublin 5 wound up.

Peel Aviation, it said, 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 the indebtedness to Corporate Aircraft Funding was in the sum of US$14m and it was made of the principal sum of US$12m and about $US2.5m expended in relation to the storage, maintenance of the company's only asset, the aeroplane.

A US$15.5m loan facility had been advanced to Peel Aviation Ltd as part funding of its purchase of a One Bombardier Challenger 300 aircraft in 2008. Peel Aviation's obligation under the loan agreement was to be secured by way of a mortgage over Peel Aviation's interest in the aircraft and engines.

It was claimed the last payment received in relation to the loan was in 2016.

As of February 28, 2019, the total sum of US$12.1m was owing, it said, along with the storage of administration charges in the region of US$2.5m.

The aircraft, it is claimed, is owned by Peel Aviation and is registered with the Indian Aviation Authority. It has also been the subject of court proceedings in India. Peel Aviation, it is claimed, in 2008 entered into a lease agreement with Golden Wings Pvt Ltd which is 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. But in 2010 the Director General of Civil Aviation in India,(DGCA) decided after certain investigations the plane was being used for other than non-scheduled air transport services and it is claimed it was being used for the personal use of Lalit 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 and in October 2013, the DGCA recorded the plane was liable to be confiscated and refused to de-register the aircraft on public interest grounds.

In the High Court in Dublin today, Ms Justice Miriam O'Regan granting the order for the winding up of Peel Aviation Ltd put a stay on the order until Tuesday to allow for an affidavit to be filed by the appointed Liquidator Shane McCarthy of KPMG.

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