The High Court in Dublin has been asked to wind down two Irish-registered companies that are ultimately owned by Russia's GTLK - State Transport Leasing, in what could become the largest liquidation to date in Ireland, reports The Independent newspaper.
GTLK Europe DAC and the related GTLK Europe Capital DAC are part of GTLK's Europe Group's international aircraft and ship leasing business, estimated to be worth more than USD4 billion.
Four creditors claim that GTLK Europe owes them USD178 million. They have petitioned the Irish High Court for orders to wind up the GTLK firms. The claimants are Dublin-registered Trinity Investments DAC; an associated entity Allestor Europe Multi Asset Portfolio (a sub-fund of Allestor Capital ICAV); Ben Oldman Special Situations Fund LP; and Sona Credit Master Fund Limited, the latter being both registered in the Cayman Islands. They claim the GTLK companies cannot repay their debts, are insolvent and should be wound up.
Lawyers of the four creditors last week told the presiding judge, Brian O'Moore, that sanctions imposed on Russia following its invasion of Ukraine in February 2022 had "a devastating effect" on GTLK Europe. They claimed the group could no longer conduct business as the sanctions resulted in the termination of lease agreements and the freezing of its assets.
The creditors claim they had entered into agreements to refinance existing debt where they advanced significant funds to GTLK Europe Capital, of which GTLK Europe was a co-guarantor. However, since the sanctions, GTLK Europe Capital defaulted on its repayment obligations, specifically on repaying interest due on the loans.
Counsel Kelley Smith SC for the creditors told the court that GTLK was ultimately owned by the Russian Ministry of Transport. Several directors of GTLK's ultimate parent are government ministers or deputy ministers in the Kremlin.
She said the company, through a complex corporate structure, holds assets including 70 aircraft and 19 sea vessels. Its customers include airlines Aeroflot (SU, Moscow Sheremetyevo), Emirates (EK, Dubai International), and easyJet (London Luton).
Following the imposition of sanctions, the group's lease contracts should have been terminated, and the firm should have retaken possession of its assets. However, it is unclear if such steps were taken, particularly within Russia, where most of the aircraft leased were located. Smith said those aircraft continued to be operated by Russian airlines within Russia and have been wrongfully re-registered in Russia.
Western aviation authorities have suspended the certificates of airworthiness of Russian-operated aircraft. Concerns also exist over those aircraft's insurance coverage.
Since the sanctions were imposed, the counsel said, the Irish directors of the two companies had resigned, as had the companies' secretary and auditors. She added that it was also unclear if Irish-based solicitors would continue to act for or advise the two companies. Her clients' solicitors had attempted to contact GTLK Europe well before making their demands for repayments but received no response. It was, therefore, unclear if GTLK would contest the winding-up petitions.
The creditors are seeking to have Damien Murran and Julian Moroney of Teneo Restructuring Ireland appointed as joint liquidators of the companies.
Judge O'Moore agreed that the winding up application was urgent but said it was important to establish which parties would want to get involved in the liquidation proceedings. He announced deadlines for interested parties to issue notices of their intention to participate in the hearing and adjourned the case to May.
