Antigua Gazettes New Companies Legislation Offering Hope For LIAT
The Antigua and Barbuda government has provided an avenue for the regional airline, LIAT, to seek Court protection rather than being forced into liquidation after it announced that the Companies (Amendment) Act 2020 was gazetted on Wednesday.
A statement issued after the weekly Cabinet meeting said that under the amended legislation “firms that find themselves in trouble may now apply to the Court for protection from their creditors, rather than be compelled to liquidate as was the only option available to owners and creditors before passage of the law”.
The statement quoted Cabinet as expressing its appreciation to “the lawyers within the Ministry of Legal Affairs for the sterling work which they performed in order to make this possible”.
Prime Minister Gaston Browne does not share the position adopted by the major shareholders of the Antigua-based cash-strapped airline, and has instead been pushing for a plan to keep the airline, whether in a new incarnation, afloat.
Browne has said that his administration has at least EC$20 million (One EC dollar=US$0.37 cents) that could be invested in the new venture, which he said could be renamed LIAT 2020, instead of the existing LIAT (1974).
LIAT has since scheduled a meeting for July 31 of the company’s creditors to discuss its liquidation.
In the July 16, letter, signed by LIAT’s Company Secretary Diane Shurland, creditors have been informed that the meeting to be held would “consider the winding up of the company” and instructed all creditors who had claims against the company to submit them by Monday, July 27.
“A creditor entitled to attend and vote is entitled to appoint a proxy to attend and vote instead of it/him/her. A proxy need not be a member or creditor of the company,” the letter stated.
In the statement following the Cabinet meeting, it was disclosed that the “perilous state of LIAT which remains inoperable because of the closed borders in the Caribbean territories to which LIAT flies,” had been discussed.
“Antigua and Barbuda regards LIAT as an aviation export product that produces and supports nearly 400 high-paying jobs that are filled by many CARICOM nationals. LIAT also pays landing fees, rentals to the Airport Authority, and makes other kinds of purchases including fuel, that add significantly to the economy of Antigua and every country to which LIAT flies.
“It is imperative that a rescue plan be designed to ensure LIAT’s continuance, under new management and a new mandate. The Cabinet has encouraged the Prime Minister to seek an audience with other shareholder governments in order to advance the re-organizational plan that has been designed to ensure that LIAT keeps flying and delivering when borders re-open. A planned meeting scheduled for Monday past has been postponed with no new date fixed,” the statement said.
It said that the COVID-19 pandemic has affected every country in the world, but has had a disproportionate impact on countries that are primarily reliant upon tourism receipts.
“Antigua and Barbuda is one of the most adversely affected states because of reliance upon tourism,” the statement said.
CMC
