The Antigua and Barbuda government has provided an avenue for the regional airline, LIAT, to seek Court protection rather than being forced into liquidation after it announced that the Companies (Amendment) Act 2020 was gazetted on Wednesday.
A statement issued after the weekly Cabinet meeting said that under the amended legislation “firms that find themselves in trouble may now apply to the Court for protection from their creditors, rather than be compelled to liquidate as was the only option available to owners and creditors before passage of the law”.
The statement quoted Cabinet as expressing its appreciation to “the lawyers within the Ministry of Legal Affairs for the sterling work which they performed in order to make this possible”.
Prime Minister Gaston Browne does not share the position adopted by the major shareholders of the Antigua-based cash-strapped airline, and has instead been pushing for a plan to keep the airline, whether in a new incarnation, afloat.
Browne has said that his administration has at least EC$20 million (One EC dollar=US$0.37 cents) that could be invested in the new venture, which he said could be renamed LIAT 2020, instead of the existing LIAT (1974).
LIAT has since scheduled a meeting for July 31 of the company’s creditors to discuss its liquidation.
In the July 16, letter, signed by LIAT’s Company Secretary Diane Shurland, creditors have been informed that the meeting to be held would “consider the winding up of the company” and instructed all creditors who had claims against the company to submit them by Monday, July 27.
“A creditor entitled to attend and vote is entitled to appoint a proxy to attend and vote instead of it/him/her. A proxy need not be a member or creditor of the company,” the letter stated.
In the statement following the Cabinet meeting, it was disclosed that the “perilous state of LIAT which remains inoperable because of the closed borders in the Caribbean territories to which LIAT flies,” had been discussed.
“Antigua and Barbuda regards LIAT as an aviation export product that produces and supports nearly 400 high-paying jobs that are filled by many CARICOM nationals. LIAT also pays landing fees, rentals to the Airport Authority, and makes other kinds of purchases including fuel, that add significantly to the economy of Antigua and every country to which LIAT flies.
“It is imperative that a rescue plan be designed to ensure LIAT’s continuance, under new management and a new mandate. The Cabinet has encouraged the Prime Minister to seek an audience with other shareholder governments in order to advance the re-organizational plan that has been designed to ensure that LIAT keeps flying and delivering when borders re-open. A planned meeting scheduled for Monday past has been postponed with no new date fixed,” the statement said.
It said that the COVID-19 pandemic has affected every country in the world, but has had a disproportionate impact on countries that are primarily reliant upon tourism receipts.
“Antigua and Barbuda is one of the most adversely affected states because of reliance upon tourism,” the statement said.
CMC
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Ticket Holders are creditors and should attend the meeting.
Hoping Liat emails details.
Browne boy it looks like your the last man standing I guess we are all saying if this and if that but your alone on this one even if and I say if the other government’s had came in on a LIAT 2020 it would be very unlikely that it would be based in Antigua it would be just a no win situation for you.
What the PM is suggesting seems like a good idea, especially the investment of the 30% buy in from the with the former employees of their severance package, however some questions lurks in the process. (1) Can/will the new company LIAT (2020) be held liable for any liabilities of the former LIAT? (2) Will the new LIAT be utilizing the same aircraft of the old LIAT or will they be leasing/purchasing new and more economically aircraft? How much involvement will the government of the day have in the overall operation? Will the new LIAT be granted permission to transport passengers throughout the Caricom countries? Will there be a new management team hired on a performance contract basis? Will all the people (LIAT employees) in A & B that is due severance be shareholders and employees of the new LIAT? There may be some other question lurking that needs to be scrutinized before hastily actions are taken and as another blogger usually states (in my opinion).
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