LM: Jet’s RP seeks lenders’ nod to liquidate assets to pay pending salaries

9 August 2019: The resolution professional (RP) overlooking the bankruptcy proceedings of grounded Jet Airways (India) Ltd on Thursday told the Mumbai bench of the National Company Law Tribunal (NCLT) that a request has been placed before the committee of creditors (CoC) to liquidate some assets to pay a part of the pending salaries to the airline’s employees.

According to resolution professional Ashish Chhawchharia, Jet Airways currently has about 7,400 employees on its payroll. During its peak, the airline had over 16,000 employees, including about 1,300 pilots.

“We have requested CoC’s permission to liquidate some assets to pay the salaries,” Chhawchharia said, adding that Jet Airways currently has no revenue from operations and, hence, paying employee salaries remains a concern.

Jet Airways, which had grounded its operations on 18 April, due to an acute fund crunch, is yet to pay salaries since January to a section of its staff, including pilots, engineers and general managers. The airline hasn’t paid salaries to the rest of its staff since March.

Employee associations of Jet Airways had earlier sought the court’s permission to release their salaries.

The NCLT bench on Thursday also heard the claims of Luckystar Pvt. Ltd, which owns Siroya Centre, the former headquarters of Jet Airways. Luckystar had earlier stated that the airline owes them dues since the airline’s rental lease for the building ended in April.

Chhawchharia informed the bench that Siroya Centre’s premises are not required anymore and the staff will be shifted to another property owned by the airline.

He also sought return of a portion of the deposit—with the deposit standing at about ₹10 crore—which was taken by Luckystar to rent out Siroya Centre to Jet Airways.

Chhawchharia said that Luckystar could deduct a part of its dues from the deposit and file claim for the remaining.

He added that this proposal will be put before the committee of creditors.

In case of a rejection from the committee of creditors, the matter will be heard in the court.

The tribunal, consisting of judges V.P. Singh and Rajesh Sharma, will hear the case again on 28 August.

On 20 June, the Mumbai bench of the National Company Law Tribunal admitted Jet Airways under the Insolvency and Bankruptcy Code (IBC).

A consortium of 26 banks led by the State Bank of India had approached the tribunal to recover dues of more than ₹8,500 crore.

Lenders have been trying to sell the beleaguered airline as a going concern for the past five months.

The LiveMint reported

Categories: General News, India Bankruptcy

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