Hearing of petition to wind up two Russian state-owned firms adjourned

The High Court has agreed to adjourn a hearing to wind up two Russian state-owned aircraft and shipping leasing firms worth more than $4.5 billion (€4.11 billion) to the end of the month.

Four creditors of the firms have asked the High Court to appoint a liquidator to Irish-registered GTLK Europe DAC and related entity GTLK Europe Capital DAC on grounds the firms are insolvent and unable to pay their debts.

The four, whose petition is being supported by other creditors of the group, want Damien Murran and Julian Moroney of Teneo Restructuring Ireland appointed as joint liquidators to the companies, which have been hard hit by international sanctions imposed on Russia following the invasion of Ukraine.

The companies are opposing the application and claim that, despite the sanctions, they are solvent.

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If the application is successful and a liquidator is appointed to the firms, it would be the largest winding-up in the history of the Irish State.

Mr Justice Brian O’Moore had fixed the hearing of the petition to wind up the companies for next week.

However, following a pretrial application by Benedict Ó Floinn SC, for the GTLK companies, on Thursday, the judge agreed to put the hearing back to the end of May.

Mr Ó Floinn said his side has done its best to comply with a timetable for exchanging legal documents. However, given the complexities involved, they will not be able to furnish legal submissions in time for next week’s planning hearing.

An additional period of four weeks would allow his side to furnish its legal submissions.

Kelley Smith SC, instructed by William Fry Solicitors, for the creditors, opposed the adjournment.

She said there appeared to be no dispute regarding the facts of the case and her clients are concerned about the matter being prolonged any further than necessary.

Mr Justice O’Moore said the court wanted to be fair to all sides and agreed to adjourn the matter to the end of the month. He fixed the hearing for May 29th.

Given the urgency of the matter and the size and scale of the businesses sought to be liquidated, the judge said he was not prepared to put the matter back any further than the end of the month.

GTLK is Russia’s largest leasing business in the transport sector. It is ultimately owned by the Russian Federation’s ministry of transport.

Several directors of GTLK’s ultimate parent are government ministers or deputy ministers in the Kremlin.

[ Kremlin-owned GTLK firms to fight winding-up application in Irish High Court ]

The four creditors that have petitioned the court for orders winding up the GTLK firms are: Dublin-registered Trinity Investments DAC; Allestor Europe Multi Asset Portfolio, which is a sub-fund of Allestor Capital ICAV; Ben Oldman Special Situations Fund LP; and Sona Credit Master Fund Limited. The latter two companies are registered in the Cayman Islands.

The creditors claim they are owed some $178 million by GTLK Europe.

The creditors claim the economic sanctions imposed on Russia following its invasion of Ukraine in February 2022 have had “a devastating effect” on the GTLK Europe group.

The GTLK Europe group’s international leasing business is headquartered in Dublin, and the firms sought to be wound up are at the top of the group’s structure.

The creditors claim they entered into a series of agreements to refinance the respondent company’s debts, where they advanced significant funds to GTLK Europe Capital, of which GTLK was a co-guarantor.

After the sanctions were imposed, the creditors claim, there has been significant default by GTLK Europe Capital regarding its repayment obligations, specifically the requirement to repay interest due on the loans.

The creditors claim the group has not satisfied their demands for repayment.