Nordic Aviation Group filed for bankruptcy
On Friday, November 29, Nordic Aviation Group filed a petition with the court to declare Nordica and Xfly bankrupt. As of today, temporary receivers have been appointed for Nordica and the court has imposed a restriction on all transactions with Nordica's assets. In the near future, the court will also appoint a temporary bankruptcy administrator for Xfly.
With the declaration of insolvency, the day-to-day economic activities of the company ended, which means that the company is very limited in making payments, publishing information or assuming obligations. The company has so far focused on putting together a bankruptcy petition and preventing further losses to creditors. All creditors, including employees, aircraft lessors, customers and service providers, have been treated equally. In the future, the appointment of a temporary bankruptcy trustee for Nordica and Xfly will be based on the bankruptcy trustee's instructions, and all debt-related issues will be resolved during the bankruptcy proceedings in accordance with current laws.
Regarding Nordic Aviation Group's employees, a collective layoff process has been started in cooperation with the Estonian Unemployment Insurance Fund, which helps employees who had a direct contractual employment relationship with the company to receive statutory benefits. After the statutory two-week negotiation period, the company issues layoff notices to workers, and workers can apply for unemployment insurance benefits. The temporary bankruptcy trustee submits an application to the Unemployment Insurance Fund for bankruptcy benefits on behalf of the employees to cover lost wages and other statutory amounts from the company. The companies have also terminated all service contracts for leased personnel with cooperation partners, who can continue to offer their services to other airlines or submit a petition to the court to declare bankruptcy. For its part, Nordic Aviation Group has, in addition to the information day organized together with the Estonian Unemployment Insurance Fund, organized information days for employees with airlines operating in the region to help employees smoothly find a new employer.
The majority of used leased aircraft by Nordic Aviation Group have been properly returned to the destination specified by the leasing companies. Nordic Aviation Group has also brought back to Tallinn Airport the planes owned by Transporti Varahaldus OÜ, followed by proper storage and, if necessary, maintenance of the planes, which allows Transporti Varahaldus to continue with the process of selling the planes. During the bankruptcy proceedings, the company, in coordination with the bankruptcy trustee, continues to cooperate with the contractual partners at the minimum necessary level in order to preserve the value of its assets and prevent additional damage to creditors.
According to the statement submitted to the court, after deducting the value of the assets, the company has debts in the amount of EUR 38 million. During bankruptcy proceedings, both the value of the company's assets and its debts may change.