The High Court has been asked to wind up two Irish registered companies that are part of a group involved in the leasing of aircraft and ships with an estimated worth of over $4.5 billion (€4.11 billion), which are ultimately owned by the Russian Federation.
Should the court agree to appoint liquidators to GTLK Europe DAC, and the related GTLK Europe Captial DAC it would be the largest winding up in the history of the state.
The court heard from lawyers acting for four creditors of the company, who have sought to have the firms liquidated, that the economic sanctions imposed on Russia following the invasion of Ukraine in February 2022 have had "a devastating effect" on the GTLK Europe Group.
They claim the group is no longer able to conduct any business as the sanctions have led to the termination of lease agreements of the group's leases, and the freezing of the group's assets.
GTLK's Europe Group's international leasing business is headquartered in Dublin, and the firms that are sought to be wound up are at the top of the group's structure.
The four creditors that have petitioned the court for orders winding up the GTLK firms are Dublin registered Trinity investments DAC and an associated entity Allestor Europe Multi Asset Portfolio, a sub fund of Allestor Capital ICAV.
The other two creditors seeking the winding up orders are Ben Oldman Special Situations Fund LP and Sona Credit Master Fund Limited which are both registered in the Caymen Islands.
The four creditors claim that they are owed some $178 million (€162.5 million) by GTLK Europe.
They claim that they entered into a series of agreements to refinance existing debt, where they advanced significant funds to GTLK Europe Captial, of which GTLK was a co-guarantor.
Sanctions
Counsel said that following the imposition of the sanctions there has been significant default by GTLK Europe Capital regarding it repayment obligations, specifically the requirement to repay interest due on the loans.
The creditors claim that the group has not satisfied their demands for repayment, and in a petition to the High Court say the Irish registered entities and associated group of companies are unable to pay its debts are insolvent and should be wound up.
The matter came on an ex-parte basis before Mr Justice Brian O'Moore on Wednesday afternoon who made various directions in the creditors' application.
Kelley Smith SC instructed by William Fry Solicitors for the creditors told the court that GTLK, is Russia's largest leasing business, and leases ships and aircraft to customers all over the world.
It is ultimately owned by the Russian Federation's Ministry of Transport. Several directors of GTLK's ultimate parent are government ministers or deputy ministers in the Kremlin.
Counsel said that the company, through a complex corporate structure, holds assets including 70 aircraft and 19 sea vessels. Its customers include airlines Aeroflot, Emirates and EasyJet.
Counsel said arising out of the sanctions the group's lease should have been terminated, and that the firm would retake possession of its assets.
However, it was not clear if any such steps have been taken, particularly within Russian where the majority of the aircraft leased are located.
Those aircraft continue to be operated by Russian airlines, within Russia and have been wrongfully re-registered in Russia, counsel said.
Russian operated aircraft's certificates of airworthiness have been suspended by certain aviation authorities. There were also concerns over what insurance cover, if any, is in place in respect of those aircraft.
Counsel said that since the sanctions were imposed the Irish directors of the two companies had resigned, as had the companies secretary and auditors.
It was also unclear if Irish-based solicitors are continuing to act for or to advise the two companies counsel said. Their current directors and secretaries are Russian nationals and entities, counsel said.
Counsel said that her clients' solicitors had attempted to make contact with GTLK Europe, well in advance of making their demands for repayments.
However, there has been no response to their communications.
It was therefore unclear if GTLK will contest the winding up petitions. Counsel said that the creditors are legally entitled to bring the application before the court.
It was not a case of them bringing this petition in order to be paid what they are owed. It is their case that the companies are insolvent, and that it was just and equitable that winding up orders are made.
Petition
Counsel said that her clients wished to put various other parties on notice of the proceedings, including the Irish Central Bank and its equivalents in the US and the UK.
The creditors, whose petition counsel added is being supported by other creditors of the group, are seeking to have Damien Murran and Julian Moroney of Teneo Restructuring Ireland appointed as joint liquidators to the companies.
After considering submissions from counsel Mr Justice O'Moore noted the amount of money involved in the companies within the group that the court has been asked to make orders in respect of.
He agreed that the winding up application is urgent.
The Judge that it was important to establish what parties wanted to get involved in the proceedings, and if the application to wind up the GTLK companies will ultimately be contested.
The judge put in place deadlines for any interested entity to issue notices of intention to take part in the hearing, and dates for the exchange of sworn statements between any participants.
The matter was adjourned to a date in May, when the judge said that the court will be able to establish how long the winding up hearing is likely to take.
