UK: Berg blows Longmint Aviation out of the sky

UK: Berg blows Longmint Aviation out of the sky

11-Nov-2011 Source: Berg

Commercial law firm Berg has been instrumental in securing the downfall of Longmint Aviation Limited, part of the Longmint Group which together with the Erinaceous Group plc, acquired the various engineering and aviation companies at Fairoaks Airport in July 2007.

Berg has secured a string of victories in order to recover sums due, and occupation and possession of substantial premises at Fairoaks Airport.

On 28 March whilst acting for Fairoaks Airport Limited, Berg succeeded in obtaining a Summary award against Mann Aviation Group (Engineering) Limited (“MAGE”) of circa £700,000 plus substantial costs.

As a result of this Judgment MAGE was placed into Administration. Berg acted for the joint Administrators of MAGE, Messrs MCR and Begbies Traynor, thereafter in respect of obtaining an injunction to permit MAGE back into occupation of certain premises at Fairoaks Airport. Longmint Aviation Limited, the former Group Parent of MAGE had objected to the sale of MAGE’s business by the Administrators to Gama Aviation Limited and locked out MAGE/Gama asserting a lease of the premises, occupation of which was fundamental to its ongoingbusiness.

Rights of occupation of premises at Fairoaks Airport were fundamental to MAGE’s administration and/or Longmint Aviation Limited’s survival, therefore a speedy trial took place in July 2011.  In a Judgment handed down by Mr Justice Sales in August 2011 [HC11C01907] it was confirmed that MAGE had an annual periodic tenancy of certain premises at Fairoaks Airport, which constituted an overriding interest in respect of Longmint Aviation Limited’s lease claims.

On 3 May 2011 after the appoint of Receivers but before the appointment of Administrators of MAGE, Lucy Cummings, Financial Controller of Longmint Group directed the posting entries on the inter-company account between MAGE and Longmint Aviation Limited to show the sum of £2.5m as due from MAGE to Longmint Aviation Limited.  That transaction has been ordered to be reversed as a transaction at an undervalue by Mr Justice Sales who found Ms Cummings, the former Chief Operating Officer of Erinaceous Group plc and Financial Controller of the Longmint Group to have “not acted in good faith” and whose evidence was “not credible”.  He found that the effect of the booking of the £2.5m as a credit to Longmint Aviation Limited rather than as a credit to Longmint Group Limited was “to deplete the assets of MAGE, as Ms Cummings must have appreciated”.

Further to a winding up petition presented by Berg on behalf of the Administrators of MAGE, Longmint Aviation Limited was wound up on 10 October 2011.

Property Litigation Partner at Berg, Joy Barnett, who acted for Fairoaks Airport Limited and the joint Administrators of MAGE said “Longmint Aviation Limited were not prepared to give up their claims to rights of occupation or to dispute debts due, without a fight.  Occupation at Fairoaks Airport is a valuable asset for any aviation/engineering company to retain and secure, as evidenced by the disputes and quick Court intervention. We at Berg are delighted to have secured the right outcome for the benefit of the creditors as a whole of MAGE, including Fairoaks Airport Limited, and the purchaser of MAGE’s business Gama Aviation Limited.”

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