Mango Airlines faces legal challenges in its business rescue plan
Image: File
Troubled state-owned low-cost airline Mango's business rescue practitioner (BRP), Sipho Sono, has instructed his legal representatives to appeal against the Gauteng High Court, Johannesburg, judgment stopping the implementation of its business rescue plan.
The move follows Judge Denise Fisher finding that 'the plan, shorn of its complexity, amounts to nothing more than the confiscation of the creditors' claims in order that they be transferred by Sono to an investor who pays no value for them or the shares'.
The matter was brought by Aviation Co-ordination Services (ACS), which provided security-related services such as baggage and cargo screening services, baggage reconciliation, and check-in services.
The company hauled Mango and Sono to court over the plan to save the South African Airways subsidiary.
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ACS is among dozens of creditors owed about R2.91 billion by Mango before it was placed under business rescue in July 2021.
Mango owes ACS over R23.3 million and was among the creditors who voted against Sono's business rescue plan approved by 98% of the voting creditors.
ACS objected to a payment to the creditors (clause 6.2.6) in the plan, stating that all of the remaining balance of the claims of the remaining concurrent creditors will be ceded to the investor at face value thereof, but for nominal consideration.
In his latest communication all affected parties, Sono indicated that on June 17, the Gauteng High Court, Johannesburg, handed down a judgment in the application launched by ACS in terms of which it declared the compulsory cession contained in clause 6.2.6 of the business rescue plan was declared invalid and of no force and effect.
The court also declared that the business rescue plan cannot be implemented.
'Since the handing down of the judgment, the BRP has carefully studied the judgment and consulted with his legal representatives,' Sono explained.
The BRP said following the engagements with his lawyers, he intends to apply for leave to appeal against the whole judgment.
He has accordingly instructed his legal representatives to prepare the necessary documents for purposes of noting the appeal and undertook to provide further updates on the status of the appeal in due course.
loyiso.sidimba@inl.co.za
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