Go First's disproportionate liabilities consequence of aircraft grounding, says Resolution Professional: Report

According to the affidavit submitted by the Interim Resolution Professional (IRP) at the National Company Law Tribunal (NCLT), the company had not defaulted on any payments to financial creditors as of the date of filing.

The IRP contended that the airline's situation would improve if Pratt and Whitney, the engine maker, fulfills the requirement of supplying 10 engines per month as ordered by the Singapore arbitral tribunal.

Expressing doubts about the lessors' motives in opposing the company's voluntary insolvency proposal, the IRP argued that the lessors did not terminate the leases when the dues owed to them accumulated.

However, they promptly terminated the leases after the airline announced its plans for insolvency.

Although the NCLT accepted the airline's request for voluntary insolvency on May 10, aircraft lessors have filed an appeal against it with the National Company Law Appellate Tribunal (NCLAT).

The NCLAT is anticipated to deliver its decision on the lessors' appeal on May 22.

On May 15, the airline's resolution professional, in charge of the insolvency proceedings, claimed that the lessors sent a termination letter after Go First announced its intention to initiate insolvency.

This action was seen as an attempt to undermine the purpose of the Insolvency and Bankruptcy Code (IBC).

In response to the IRP's allegations, the lessors have countered by stating that Go First, despite its aircraft still being in operation, abruptly suspended its operations and sought insolvency before the NCLT.

The lessors questioned the logic behind the airline's sudden decision to file for voluntary insolvency, creating a sense of false urgency.