The Gauteng High Court has ruled that Mangos business rescue plan BRP cannot be implemented, finding that the plan would prevent the airline from properly paying its creditors.
Aviation Co-ordination Services ACS, which provided services such as baggage screening, reconciliation and check-in, submitted an application to the Gauteng High Court which accused Mango and its business rescue practitioner, Sipho Sono , of attempting to implement a business rescue plan that would see creditors paid only a percentage of what they are owed.
ACSs applicationAccording to the proposed plan, Mango creditors would receive only 4.43 cents for every rand owed, which amounts to R44 300 for ever R1 million owed. Thereafter, regular creditors, excluding Sars and those with claims related to unflown tickets, would be paid a 'top up' settlement payment for their claims.
All of the remaining balance of the Claims of the remaining Concurrent Creditors are ceded to the Investor at face value thereof but for nominal consideration, states the plan.
ACS argues that this clause effectively transfers control of outstanding debts to the investor, resulting in creditors losing the right to recover funds directly.
