Last Thursday, the budget airline submitted a petition to the National Company Law Tribunal (NCLT), requesting the application of bankruptcy laws to protect its interests. It also sought an interim moratorium to prevent aircraft lessors from seizing its fleet of 26 planes. Furthermore, the airline requested the appointment of an insolvency resolution process (IRP) to enhance the prospects of Go First.
The NCLT, the President Justice Ramalingam Sudhakar and technical member LN Gupta announced the order, adding, “We appoint Abhilash Lal as IRP (Insolvency Resolution Professional). Suspended board of directors will cooperate with the IRP.”
The NCLT court also said, “The suspended directors are also ordered to deposit Rs 5 crore to make the immediate expenses.”
On the moratorium sought by the airline, the court said, “The necessity of going into the merits of the application is that the Section 10 is already been admitted in respect of the corporate applicant and the moratorium is already being initiated.”According to the Insolvency and Bankruptcy Code (IBC), the effect of such an interim moratorium is that all pending legal proceedings with respect to any ‘debt’ are deemed to have been stayed.
Crisis-hit Go First had sought various interim directions from the NCLT bench, including restraining lessors from taking back aircraft, and the Directorate General of Civil Aviation (DGCA) from taking any adverse action against the airline.The Wadia Group-owned airline has liabilities worth around Rs 11,000 crore.
