Legality [of Airports Blocking VA liveried Aircraft]

[jb747]

I’m certainly no financial or legal expert, but the behaviour of Perth Airport is interesting. Given that Virgin is in the hands of administrators, and that there is a mandated queue for payment of outstanding debts, what then is the point of blocking aircraft as they’ve done. It’s obviously an attempt to move themselves up the payment totem pole, but surely that would not be an effective strategy. Beyond that, I’d expect that the aircraft are actually leased, so they’re really taking action against a third party.

 

[serfty]

I believe approx. half the VA liveried aircraft are leased.

Certainly, I am thinking it is more for show than anything else.

 

[oz_mark]

It's all symbolic.

 

[robbo135]

They don't have a leg to stand on. If the aircraft are leased or secured against debt then there is no way they can seize the aircraft legally.
Even if the aircraft are unencumbered, good luck if they think they can move themselves up the list of creditors.

Just a bit of chest beating which will get them nowhere, makes you think QF may not have been exaggerating about their claims with dealing with PER airport management.

 

[CMA222]

Standard commercial practice. Exercise a lien over the property of the debtor as security for payment for services provided and not paid for. If you take your car to the mechanic and you refuse to pay for the work he undertakes for you he exercises his lien and holds the car as security until he gets paid for the work. It does not matter who owns the car only that the services were provided for it. The same thing happened back in the days of Compass I and/or II, if I recall correctly.

 

[serfty]

If you take your car to the mechanic and you refuse to pay for the work he undertakes for you he exercises his lien and holds the car as security until he gets paid for the work.

Not if you enter administration/bankruptcy - legally the mechanic simply joins the list of creditors and must surrender any value of the car to the trustee/liquidator.

 

[Cruiser Elite]

Every individual, entity, corporation has the right to take what action they deem necessary if they feel they have been wronged - nothing new here.

The financial and legal reps for all involved will finally arrive at a resolution and if not off to court we go - just another event on another day in paradise IMHO

 

[Princess Fiona]

They don't have a leg to stand on. If the aircraft are leased or secured against debt then there is no way they can seize the aircraft legally.
Even if the aircraft are unencumbered, good luck if they think they can move themselves up the list of creditors.

Just a bit of chest beating which will get them nowhere, makes you think QF may not have been exaggerating about their claims with dealing with PER airport management.

ADL has joined them in blockading VA aircraft.
Do know if they have the same reputation as PER airport management.

 

[eastwest101]

I’m certainly no financial or legal expert, but the behaviour of Perth Airport is interesting. Given that Virgin is in the hands of administrators, and that there is a mandated queue for payment of outstanding debts, what then is the point of blocking aircraft as they’ve done. It’s obviously an attempt to move themselves up the payment totem pole, but surely that would not be an effective strategy. Beyond that, I’d expect that the aircraft are actually leased, so they’re really taking action against a third party.

Question for you JB - Its unlikely to happen I know - but if the VA administrators wanted to use an aircraft and had a licenced crew to operate it (and ground handlers) and a push back or taxi clearance was given by ATC, whats the legal status of that loader then? Wouldn't that be obstructing an aircraft? Isn't that loader already parked in a designated clearance zone for the operation of an airbridge anyway?

 

[offshore171]

Blocking in aircraft with bulldozers has a bit of a "3rd world dictatorship" feel about it.

Stay classy Perth airport...

 

[CMA222]

Not if you enter administration/bankruptcy - legally the mechanic simply joins the list of creditors and must surrender any value of the car to the trustee/liquidator.

You are mixing the administrations, including in your example. This is a temporary appointment of an administrator not a liquidator. Administrators have an entirely different roll often preceding the appointment of a liquidator. The Administrator takes possession of the company and its assets and usually continues the operation of the business. The Administrator assumes the management and has to make arrangements with creditors or place the company into liquidation.

 

[serfty]

The Administrator assumes the management and has to make arrangements with creditors or place the company into liquidation.

I generalised, yes, but your mechanic is a creditor in the circumstances I outlined and would be in line to get something, if eventually there was something to get.

All assets involved are legally supposed to be assessed by the Administrator for any value, including the vehicle.

Of course, the mechanic could try to discretely do something with the vehicle before it gets noticed.

That is not going to happen with the aircraft in question.

 

[Quickstatus]

The Administrator takes possession of the company and its assets and usually continues the operation of the business. The Administrator assumes the management and has to make arrangements with creditors or place the company into liquidation.

But it cannot pay known debts before other known debts - in other words it cannot favour one creditor over another.
And it cannot necessarily take on new debts if it believes the company is insolvent because they would then be personally liable for those debts.
Everyone has to join the queue.
PER/ADL are just trying to get into the secured creditor ranks.

I wonder how is fuel, airport charges, maintenance and catering are currently being paid moving forward?. PAYG?

 

[jb747]

Question for you JB - Its unlikely to happen I know - but if the VA administrators wanted to use an aircraft and had a licenced crew to operate it (and ground handlers) and a push back or taxi clearance was given by ATC, whats the legal status of that loader then? Wouldn't that be obstructing an aircraft? Isn't that loader already parked in a designated clearance zone for the operation of an airbridge anyway?

I have no idea, but I'd expect some of the tugs would have little trouble moving these obstructions. ATC aren't going to stop you. Not their job.

There's an entire industry based on repossessing aircraft from shonky places around the world. Perth probably wouldn't be terribly difficult.

 

[Quickstatus]

@jb747 are aircraft logbooks always kept with the aircraft?
They are electronic or old fashioned logbooks?

My watching of airplane repos suggest that an aircraft's value is enhanced with logbooks present. (Though the show generally show repos of anything from cropdusters to bombardier globals not 747)

 

[jb747]

@jb747 are aircraft logbooks always kept with the aircraft?
They are electronic or old fashioned logbooks?

Virgin would have all of the logs. There's a paper book, but its contents are transferred to computer systems.

 

[esseeeayeenn]

Not every creditor automatically has the right to exercise a lien over assets.
It's a complicated area of law and it has been made more complex by the Personal Property Security Act 2009 (Cth).
The actions of Perth Airport are pure theatre. There are legal avenues such as Mareva injunctions (now called asset freezing orders) available to prevent the movement of assets out of the jurisdiction. There's no need to take such physical measures.
But what would you expect from a property developer which just happens to own an airport.
I'm only surprised they could stop filling in environmentally important wetlands and building more DFOs long enough to spare the earthmoving equipment.

 

[Mr Pumblechook]

The same thing happened back in the days of Compass I and/or II, if I recall correctly.

The lien on Compass aircraft was by the ATC provider, which has a specifically legislated right to liens to recover airways charges.

 

[SeaWolf]

I'm not an accountant but I thought the whole point of administration was to provide a business respite from its creditors while the administrators sorted things out and decided on a path forward.

If the creditors could all just grab at any asset within reach (secured or otherwise) and use it as leverage to demand immediate payment then that would really seem to defeat the purpose of administration.

 

[Sprucegoose]

I’m certainly no financial or legal expert, but the behaviour of Perth Airport is interesting. Given that Virgin is in the hands of administrators, and that there is a mandated queue for payment of outstanding debts, what then is the point of blocking aircraft as they’ve done. It’s obviously an attempt to move themselves up the payment totem pole, but surely that would not be an effective strategy. Beyond that, I’d expect that the aircraft are actually leased, so they’re really taking action against a third party.

Correct JB, its vacuous leverage as the Virgin Administrator in the absence of orders against him, would apply to the courts to have the aircraft released. The distribution by the Administrator are governed by law and not coercion.