Only 19% of claims by creditors admitted: Go First RP tells Court

The Resolution Professional (RP) of grounded airline Go First told the National Company Law Tribunal (NCLT) that Rs 28,558 crore of claims has been received by the creditors, out of which 19% of the claims have been admitted and the remaining claims are under verification.

This includes Rs 5,639 crore of claims from financial creditors or lenders, of which 68% has been admitted, while the remaining is under verification by the RP. On the other hand, the claims of operational creditors stand at Rs 19,701, of which 4% has been admitted, while the remaining is under verification.

Advocate Diwakar Maheshwari, appearing for the RP, told the tribunal in the hearing on Tuesday, that there are approximately 8,000 operational creditors globally, and they are moving an application so that the NCLT can appoint a representative for all operational creditors.

In total, there are 8,019 creditors, out of which claims of only 6,604 have been admitted, while the claims of the remaining are under verification.

With no prescribed mechanism for the appointment of representatives for the operational creditors under the Insolvency and Bankruptcy Code (IBC) or the CIRP Regulations, keeping in mind the large number of Operational Creditors (i.e., 20 Lessors: 400 Vendors: 900 Travel Agents: 6 Statutory Authorities: 150 employees and workmen, and 6,400 individual ticket holders), it is extremely impractical to issue notices to each one of them for the meeting of the CoC (Committee of Creditors), the RP told the tribunal.

Maheshwari argued that it would become very difficult to address the claims by operational creditors if they approach the RP all at once, so a representative is required.

When the NCLT asked the RP whether such an order could be passed without giving notice to the operational creditors, the RP said it could be done and said that the Insolvency and Bankruptcy Code (IBC), 2016 has provisions for the appointment of such representatives.

The case will now be heard on December 1.

In the last hearing, a travel agent had also filed a plea to intervene in the proceedings, stating that the airline owes them Rs 5.7 crore.

Go First filed for voluntary insolvency on May 2 under Section 10 of IBC, and on May 10, the NCLT admitted Go First’s insolvency plea.

Go First’s aircraft lessors had then filed an appeal against the NCLT order in the National Company Law Appellate Tribunal (NCLAT), saying their aircraft should be returned to them as they had terminated the leases before the moratorium kicked in.

The corporate affairs ministry then released a notification exempting aviation leases from the moratorium. Recently, the Director General of Civil Aviation (DGCA) also filed an affidavit in the Delhi High Court, saying the ministry notification exempting aviation leases from moratorium under IBC should apply to pending cases too.

Go First - Summary of claims as of 06th Oct, 2023 (in crore)

Financial Creditors

Claims received- 5,639

Claims admitted- 3,844

Claims under verification-1,795

Operational Creditors

Lessors

Claims received-19,701

Claims admitted- 776

Claims under verification- 18,924

Vendors

Claims received-908

Claims admitted- 323

Claims under verification-584

Travel Agents

Claims received-898

Claims admitted- 501

Claims under verification-396

Individual Ticket Holders

Claims received-18

Claims admitted- 18

Claims under verification-none

Government Dues

Claims received-1,318

Claims admitted- none

Claims under verification-none

Employees & Workmen

Claims received-74

Claims admitted- none

Claims under verification-74

Total Operational Creditors

Claims received- 22,919

Claims admitted- 1,620

Claims under verification-21,298

Total claim by creditors

Claims received- 28,558

Claims admitted-  5,464

Claims under verification-23,093