The assets of two Dublin-based aircraft and ship lessors are under the control of the companies’ joint liquidators, rather than their sanction-hit Russian parent, the High Court has declared.
Mr Justice Michael Quinn said he would also declare that the winding-up orders made last May in respect of GTLK Europe DAC and GTLK Europe Capital DAC meant that these companies ceased to be the beneficial owners of their assets.
Instead, the judge said, they hold their assets on trust to apply them in accordance with the statutory scheme of distribution. No distribution shall be made to their ultimate parent company, which is the subject of international economic sanctions due to Russia’s invasion of Ukraine.
The two companies form part of a group that had assets of about $4.5 billion (€4.11 billion), making them what are thought to be the largest winding-ups in the history of the Irish State.
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The court heard on Monday that it was “highly unlikely” there will be any surplus funds in the liquidation but there is nonetheless a provision in the orders stating that any surplus shall be placed by the joint liquidators in a designated account suggested by the Central Bank of Ireland, which is the authority tasked with ensuring compliance with EU-imposed sanctions.
Any potential surplus funds shall not be made available to the ultimate parent company, the judge ruled.
The orders were sought by joint liquidators Damien Murran and Julian Moroney of Teneo Restructuring Ireland as part of their efforts to simplify and expedite their statutory duties.
Their senior counsel James Doherty, appearing with Emily Egan McGrath SC, told the court on Monday that the current process of applying to the Central Bank for sanction derogations on a “transaction by transaction basis” is “extraordinarily time-consuming”, with an “enormous risk” that the firms’ assets will be dissipated, he said.
The liquidators need to be able to exercise appropriate control over the assets held in various subsidiaries for the benefit of non-Russian creditors and bondholders, Mr Doherty added.
The court heard the Irish GTLK entities had been covered by the freezing regulation as they have been presumed to be controlled by their sanction-hit parent.
The two Irish-based entities were wound up in late May by order of the High Court following a petition from four creditors who say they are owed more than $178 million (€162 million).
