Scheme to pay back JetMagic creditors

SOME former shareholders in JetMagic, which owed €3.5 million when it collapsed, have put an undisclosed sum of their personal money into the group in an effort to part-compensate creditors.

Unsecured creditors stood to get nothing if the company was liquidated. But some concerned shareholders have devised a scheme to partly compensate JetMagic suppliers, badly stung when the company announced the sudden closure of the business last January.

Investors lost €11m on the venture. Despite this heavy investment loss, some shareholders have dug deep into their own pockets to put together some form of compensation for creditors.

Shareholders included Michael Foley, former boss of Aer Lingus as well as some senior figures in the IAWS. The Punch family of Cork were also involved and a number of others.

Welch & Co chartered accountants in Cork, acting for the collapsed group said in the letter to creditors that "all efforts to revive the operations or sell the company have failed and the directors have reached the conclusion that JetMagic should now be wound up".

Unsecured creditors stood to get virtually nothing in such an event and some unknown shareholders have decided to try and make good some of the €3.5m loss. For the plan to succeed, however, all creditors have to agree the terms of the deal that have not been made public.

It is understood, however, that those owed up to €2,000 will get the full amount due, while after that, the sums paid out will be relative to the amount due to each creditor.

The company was launched in Easter 2003 under a €5m plan that increased to over €11m as the group expanded its early growth phase.

IAWS Co-operative became a shareholder through a company called Remedios, but the IAWS Plc convenience food group was not involved in the airline.

It has also emerged that creditors in the group have been given a deadline of June 11 to accept the proposals on offer.

Previously an April 8 deadline had been set by the Niall Welch of Welch & Co, who subsequently extended the deadline on the grounds that "some creditors have said that they need longer to give formal approval because of the complexities of their organisations and the processes which they have to go through".

It is understood that a substantial number of creditors have agreed the terms, but the plan needs every creditor to agree the offer if it is to succeed as intended.