The commercial court of Barcelona has issued the order for the liquidation of the Spanish airline Spanair, having received the final report of the receivers, bringing the airline’s equity deficit at 519.38 million euro.

Spanair creditors filed for voluntary bankruptcy in January 2012, with liabilities of 474 million euro and announced a redundancy package for its 2,075 workers. Three days earlier, on January the 27th, 2012, the company abruptly ceased all activities, stranding thousands of passengers.

The ruling means that the receivers have a period of fifteen days to submit a liquidation plan which will set out the steps to make the process of selling the assets owned by the bankrupt company.

The report off the receivers values these assets at 52.44 million euro, compared to a liability, generated before the declaration of insolvency, of 571.83 million, resulting in an equity deficit of 519,380,000 euro.

For its part, the claims against the estate, which are those that have been generated during the handling of the bankruptcy proceedings, amount to more than 72 million euro, of which around 70 million are for the compensation payments to workers.

The court states, however, that the weight given to Spanair assets of 52.44 million, does not mean the actual value from the sale of assets during the liquidation process, as the awards will from the best offers submitted.

The Judge of the commercial court, Juan Manuel de Castro, also stresses that there is no guarantee that creditors will charge for credit, it will depend on the company having sufficient liquidity once the liquidation of assets has been carried out.

This means that they will prioritise the payment of claims against the estate, among which there are the indemnities that were decided by order of the commercial court in February 2012 and, subsequently, after bankruptcy claim.

Therefore, the first to be given priority will be secured creditors, labour and government loans, and finally, the appropriations deemed ordinary.

The High Court emphasizes however that the opening of the settlement does not imply, in any case, the beginning of the sale of assets or the payment of claims, which will occur later.

The commercial court handling the case has posted up to 3,000 creditors of Spanair, which include shareholders, including SAS and the Government, as well as suppliers, AENA and Social Security, among others.

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The post SPANAIR FORCED INTO LIQUIDATION appeared first on Today in Spain.

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