
In Helitech 2016: Shaking Up the Offshore Helicopter Business I commented that:
“some lessors are definitely not welcoming the recently announced Milestone (part of GE) relationship with CHC…have no doubt that the position is pretty dire for those lessors focused on heavy aircraft in the offshore oil and gas market and those with CHC exposure – so expect some adjustments in the structure of the leasing business”.
That was an understatement. On 14th October Waypoint lodged an Objection to CHC’s court application to expedite the Milestone agreement as part of their Plan Support Agreement to exit Chapter 11. The tone of the Objection is vitriolic coming from a spurned potential suitor to become lead lessor to CHC. Waypoint make the case in their Objection that they stand to lose significantly if Milestone do get into bed with CHC.
The date set for an expedited hearing is currently November 2nd with any Objections having to be filed by October 26th. CHC filed the Motion for the Plan Support including the Milestone Agreement on October 11th. The agreement between CHC and Milestone is conditional on court approval by November 11th.
The Waypoint Objection informs us that Waypoint was the other negotiating party with CHC:
“As one of the Debtors’ largest lessors and creditors, Waypoint engaged in good faith negotiations with the Debtors regarding a potential restructuring of the Waypoint Lease Agreements. In the Plan Support Motion, the Debtors state that they engaged in “parallel negotiations” with “two of their largest lessors”—Waypoint and Milestone…regarding a potential lease restructuring transaction …However, the Debtors abruptly stopped negotiations with Waypoint and, despite Waypoint’s request to continue negotiations, elected to negotiate a transaction exclusively with Milestone. (Case 16-31854-bjh11 Doc 969 Filed 14/10/16)
Waypoint is a significant creditor of CHC with a large exposure on aircraft. Twelve of their aircraft have already been returned with another three pending. According to this latest Objection, Waypoint’s exposure totals a further 29 helicopters and could amount to over $300 million:
“Waypoint is the holder of claims against the Debtors in the aggregate total amount of not less than $90,452,755.14, consisting of lease rejection damages claims in the amount of not less than $64,432,523.84, unpaid lease rental claims in the amount of not less than $17,263,092.30… and other costs, fees, expenses, losses, liabilities and other damages as a result of breaches by the Debtors of the Waypoint Lease Agreements in the amount of not less than $8,757,139.00. Waypoint’s claims against the Debtors stand to increase significantly (by an amount potentially well in excess of $300 million) to the extent the Debtors reject additional Waypoint lease contracts.”
Waypoint’s claim is that they will be significantly prejudiced by the shortened notice period and are clearly aggrieved that they were not included in the negotiation of the Support Agreements, even going so far as to complain that the Motion to expedite the hearing was filed on 12th October, the day of Yom Kippur when their New York counsel was not available.
Copyright and full responsibility for the content of this article remains with Allan Blake, an independent Aviation Consultant. He was Regional Director (Asia Pacific) with the Bristow Group for seven years. He is also the author of “Dynamic Directors: Aligning Board Structure for Business Success” (Macmillan).
Related Posts
- Bell V-280 Valor short-listed for Collier Trophy
- FRASCA Expands Capacity for Level D FFS Contract
- NY National Guard Honors Fallen Aircrew
- HAI names winner of 2021 Salute to Excellence award for Communications
- Police Aviation News – March 2021 Edition
- Bell awarded $16M contract for engineering AH-Z and UH-1
- EHang Supports Chinese National Transportation Network Plan
- Le Havre marine pilots lose AS365N3 cruise altitude to just 60 feet
- Israel selects CH-53K from Sikorsky over CH-F47 from Boeing
- UK man jailed for shining torch into police helicopter cockpit
- Dropsafe launches Helideck Perimeter Safety Net
- EHang explores coastal Urban Air Mobility with first over-water EH216 flights
- Archer commits Urban Air Mobility Network In Los Angeles by 2024
- HAI announces candidates for election to Board of Directors
- Air Evac Lifeteam To Open Air Medical Base in Clarinda
- Embry-Riddle helicopter student wins Veterans Memorial scholarship
- Sikorsky awarded $9M contract for H-53 landing gear
- New US East Coast scheduled helicopter flights to launch in June
- US Army tests UH-60 Load Stability System Litter Attachment from Vita Inclinata
- Raytheon awarded $15M more on CV-22 countermeasures contract