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An Irish court has ruled that Norwegian will receive bankruptcy protection. It will give the company a break from creditors for a few months, while the company’s second rescue package is prepared this year.
Stock Image of Norwegian planes parked in Corona
Carina Johansen / NTB
Published:,
The case is being updated …
Shortly after 12 noon Norwegian time, the hearing began in Dublin High Court, where Judge Michael Quinn was to decide whether Norwegian would receive bankruptcy protection.
Just over four hours later, the trial ended and the conclusion was clear: Norwegian’s Irish subsidiaries will be protected from bankruptcy and the Norwegian parent company will also be protected.
– I decided to appoint an “examiner”, both for the five companies behind the petition and for Norwegian Air Shuttle, said Judge Michael Quinn at the court hearing on Monday afternoon.
The judge grants Norway protection against bankruptcy by appointing a so-called “examiner” (examiner), who will handle the restructuring.
This means that none of those who have loaned money to Norwegian, the creditors, can bankrupt the company under Irish law in the coming months.
During the hearing, a lot of time was spent determining how far this protection goes. The judge appeared in legal proceedings that concluded that British law would in all likelihood follow Irish protection.
Whether it will also apply in Norway is not clear, but Norwegian’s lawyers noted at the hearing that the company is considering filing for Norwegian bankruptcy protection under the new reconstruction law.
The judge noted how closely the companies are connected in the Norwegian sphere and how dependent they are on each other:
– The survival of a company depends on the others, said Quinn and continues:
– NAS is the ultimate parent company of the relevant Irish companies
It will be finished in February
Under Irish law, the process can take up to five months, but Norwegian is aiming for completion on February 26.
In his reasoning, the judge referred both to the problems with Boeing’s planes over the years and to the effect of the pandemic on the company.
– I noted that only one of the notified parties actively supported the petition, Rolls-Royce, while most of the others were neutral. One party expressed concern about the extraterritorial effect of such a decision
20 different creditors were represented by different attorneys at the digital court hearing.
Norwegian has applied for and received protection for the two Irish subsidiaries Arctic Aviation Asset (known as AAA), which owns and leases aircraft for Norwegian, and Norwegian Air International (known as NAI), which is one of Norwegian’s airlines.
In addition, Norwegian has applied for and received protection for three subsidiaries under AAA and NAI, as well as Norwegian parent company Norwegian Air Shuttle (NAS).
He challenged the company on how Irish they are
As Norwegian has companies in Ireland, the UK and several European countries, and is based in Norway, the court had to decide whether Ireland is the right place to file a bankruptcy protection case.
As E24 mentioned the previous Monday, Judge Quinn spent part of his time during court day clarifying how Irish companies seeking protection really are.
When asked if the subsidiaries acted as agents for Norwegian Air Shuttle (NAS), the airline’s attorney, Brian Kennedy, replied that NAS are shareholders in the companies and there is business in Ireland.
– It is a cumulative situation here, in which many factors have to be taken into account. However, we are talking about a significant and concrete link with the jurisdiction (Ireland, journal.anm.).
He also noted that companies with less connection to Ireland than Norway have previously received bankruptcy protection under the examination scheme.
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Irish judge challenges Norwegian for how Irish they are
Neutral creditors
During the hearing, it emerged that the large leasing companies Aercap, BOC Aviation and Avolon would not oppose the petition and were therefore neutral that Norwegian received bankruptcy protection during what in Ireland is called “examinership “.
Aviation Capital, which sued Norwegian in July, was also neutral on the petition. At the same time, the company reserved the question whether the Norwegian parent company should also be protected under the Irish regime.
– We do not support or reject the application for Irish bankruptcy protection. But we reserve the right to remain at liberty in view of whether the protection can be extended beyond Irish jurisdiction. Whether the Irish protection will have an extraterritorial effect in Norway, said attorney Thomas Ryan at A & L Goodbody, which represents Aviation Capital.
An “examinership” means that creditors cannot file claims or declare bankruptcy of the business, as long as it has the protection of the court.
Asked about challenges abroad
Norwegian’s lawyer, Brian Kennedy, referred during the hearing to the assessment of one of the airline’s Norwegian lawyers on a Norwegian reconstruction process.
“Although major creditors will go through the review process, some smaller creditors are threatening legal action against the company,” Kennedy said during the hearing.
He also explained that a British court with “overwhelming odds” will follow the Irish court’s decision. Kennedy based this on a statement by Daniel Bayfield, who has pledged to consider this issue.
Judge Quinn also asked if there were other jurisdictions beyond Norway and the UK that could influence the process when it comes to recognizing the Irish variant of bankruptcy protection.
– Something may need to be done under Chapter 15 in the US, but it shouldn’t be a challenge. If something happens, it will be fixed, but now we don’t see it as a challenge, Kennedy responded.
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