Garuda Indonesia has won a lawsuit against two aircraft lessors Greylag 1410 and Greylag 1446, in Paris. The judge ruled in favour of Garuda Indonesia by ordering to release the funds in frozen account with the leasing companies paying compensation.
Greylag Goose Leasing 1410 and Greylag Goose Leasing 1446 are special purpose vehicles (SPV) under Avenue Capital Aircraft Holdings. Greylag SPVs launched a legal case against Garuda Indonesia in an attempt to derail Garuda's restructuring process and have the airline declared insolvent.
In 2013, Greylag Goose Leasing 1410 leased an A330-200 to Garuda, while Greylag Goose Leasing 1436 leased an A330-300. Later, during the restructuring process, the airline tried to return the planes but Avenue Capital refused to accept them. In 2022, the lessors initiated legal action against the airline and was successful in freezing the order issued.
The Paris Civil Court ruled in favour of Garuda Indonesia last week, overturning those orders and has ordered the lessors to pay $245,805 dollars to the airline in damages and costs.
Indonesian courts have ratified Garuda's restructuring plan and the plan is accepted by creditors all over, noted the judge stating that SPV’s case lacked legal basis.
“Various actions taken by Greylag 1410 and Greylag 1446 were unfortunate and they were hindering the steps to accelerate the company's performance,” said Irfan Setiaputra, CEO, Garuda Indonesia said in a statement following the case result.
"We need to emphasise that the restructuring that was successfully completed by Garuda Indonesia went through a long discussion process with all creditors in accordance with applicable laws," Setiaputra said. "The existence of attempts to act against the law through various lawsuits filed by the two lessors is of course an action that is very unfortunate and contrary to the spirit of synergy between Garuda Indonesia and all of its stakeholders, as well as hindering steps to accelerate the company's performance which, in this case, concerns the interests of the majority of creditors."
Garuda's administrators came to an agreement with 95.07% of creditors, including aircraft lessors, to restructure over $9 billion in debt, in June 2022. The creditors have agreed to settle their claims for $5.1 billion, most of which is converted to equity.
However, the Greylag companies were dissatisfied with the $148 million Garuda's administrators allocated to them and objected to the calculation of the claims and argued that the airlines could pay more. The Greylag companies had claimed $384.7 million for their aircraft leases.