B747forever wrote:

I am sure a good amount of those booked their AB flights after bankruptcy was declared. It is beyond me why people still buy tickets with AB.

It is standard PR spin to prove Iceland will suffer by blocking the aircraft. Wait for media reports about aircraft condition to follow.

Isavia should just pull any plug-in components like avionics/flight deck components or drop an engine to cover its cost and remove those snow plows. Why waste those snow plows.

dtw2hyd wrote:

B747forever wrote:

I am sure a good amount of those booked their AB flights after bankruptcy was declared. It is beyond me why people still buy tickets with AB.

It is standard PR spin to prove Iceland will suffer by blocking the aircraft. Wait for media reports about aircraft condition to follow.

Isavia should just pull any plug-in components like avionics/flight deck components or drop an engine to cover its cost and remove those snow plows. Why waste those snow plows.

That would be tampering with an aircraft and you start to get even more lawyers and insurances who come into play.

A lot easier not to touch the aircraft and just block it. Not that it is the smartest move either...

runway23 wrote:

That would be tampering with an aircraft and you start to get even more lawyers and insurances who come into play...

No, any smart lawyer can prove it is a way of protecting the value of an abandoned aircraft. The airport can tack on mothballing charges.

I think lessors never contemplated this scenario, they had only five degrees of protection, now they need one more.

A few weeks ago people were asking why the CAA chartered in planes for the Monarch repatriation flights instead of using the existing Monarch fleet, this is exactly why !!!

vfw614 wrote:

I hope you guys are just as relaxed when you borrow your car to someone...

I wouldn't lend my car to just any friend if I knew he had debt problems, was an alcoholic or did not even have a drivers license. If such a car caused an accident it would be only logical that it was parked at the police station until 3rd party damages are settled and it would be up to the owner to make sure there is insurance coverage also when someone else drives it, or suffer the consequences...

In that case, Isavia has the short stick of the match.
As AB ceases to exist as an Airline on coming Friday, I guess that Isavia will have to secure a place in the queu to get some quota in a couple of years. The lessor seems to have no onward lease yet, so he enjoys a cheap and secure, albeit cold place to park his asset. Isavia will lose that case.

Not sure about that. Iceland is not bound to follow german law.
Why doesn't airberlin just pay for what services they had used before? Must be more expensive to park a jet for some days than to come up with a little cash. How do they pay for fuel? Do they just leave without paying? I hope not.

Isavia should just pull any plug-in components like avionics/flight deck components or drop an engine to cover its cost and remove those snow plows. Why waste those snow plows.

They are in no legal position to do this. All they are entitled to do under the relevant section of the Aviation Act is to not allow the aircraft to take off.

Why doesn't airberlin just pay what services they had used before?

Because it would be a criminal offence to do so under German law as it would be a preferential treatment of one creditor at the detriment of all others. First year insolvency law. It is not as if airberlin does not want to pay, they are simply not allowed to pay. Isavia can park as many snowploughs around the aircraft, this iwll not change the situation a jota as far as airberlin is concerned.

I wouldn't lend my car to just any friend if I knew he had debt problems, was an alcoholic or did not even have a drivers license. If such a car caused an accident it would be only logical that it was parked at the police station until 3rd party damages are settled and it would be up to the owner to make sure there is insurance coverage also when someone else drives it, or suffer the consequences.

Try harder with the analogy. A proper analogy would be that your friend has bought a computer and not paid his bills (like airberlin has not paid handling fees for passengers, taxes to the Icelandic government etc.). Now his creditor sees that he is driving around in your nice car, impounds the car, sells it off and takes the money to settle your friends debt (like Isavia sees a third-party owned aircraft airberlin uses - note that the aircraft itself does only trigger landing/handling fees for that one operation in question and these fees are fully paid - the aircraft is impounded for debt that has nothing to do with the aircraft itself). So I assume as you are happy that BOC is liable for airberlin's debt with their aircraft, you are equally happy to be liable for your friend's liability with your car. Or are you promoting double standards here?

If we compare this to a ship. You run a ship and you do not pay your dues in a foreign harbor. Next time that ship calls into that harbor it can be sized, all the same if the owner has changed, the owner gone bankrupt e.t.c.

Again, the analogy does not fit. That's different because there is a lien on the ship for dues the ship has triggered. The aircraft blocked in Iceland is blocked for general debt of its operator that has absolutely nothing to do with the aircraft itself (unless it has flown to KEF before Aug 15 and landing and ATC fees for that specific aircraft are still unpaid) - like airport taxes for passengers etc.

I am sure a good amount of those booked their AB flights after bankruptcy was declared. It is beyond me why people still buy tickets with AB.

As per insolvency law, all flights booked after the insolvency filing are fully protected. Thos passengers are in a better position than thosw who booked before the insolveny

It should be easy for the lessor, they cancel the German Registration, Register the aircraft in their home Country, paint over "Berlin" and tell the Airport Operator to move those snow plows.

PanHAM wrote:

It should be easy for the lessor, they cancel the German Registration, Register the aircraft in their home Country, paint over "Berlin" and tell the Airport Operator to move those snow plows.

after paying the dues.

PanHAM wrote:

It should be easy for the lessor, they cancel the German Registration, Register the aircraft in their home Country, paint over "Berlin" and tell the Airport Operator to move those snow plows.

No it is not that easy. At my operator, it was found out after acquiring it, that a particular airplane introduced into the fleet had a legal claim on it in a certain western country. It was made clear to Ops Control not to use this a/c for flights to said country. Took a couple of years to solve the matter.

vfw614 wrote:

Try harder with the analogy. A proper analogy would be that your friend has bought a computer and not paid his bills (like airberlin has not paid handling fees for passengers, taxes to the Icelandic government etc.). Now his creditor sees that he is driving around in your nice car, impounds the car, sells it off and takes the money to settle your friends debt (like Isavia sees a third-party owned aircraft airberlin uses - note that the aircraft itself does only trigger landing/handling fees for that one operation in question and these fees are fully paid - the aircraft is impounded for debt that has nothing to do with the aircraft itself). So I assume as you are happy that BOC is liable for airberlin's debt with their aircraft, you are equally happy to be liable for your friend's liability with your car. Or are you promoting double standards here?

Except that I didn't just lend my car to the friend but bought a new car for him (because the bank wouldn't give him the credit) and said he could use it as long as he needed to and pay a monthly fee to me. I then allowed him to put is own company name on my car etc. etc. etc. That wouldn't put me in the best of positions if his company goes bankrupt. I simply can't except that an operator walks away from all responsibility and his accomplices making a profit out of it, so hopefully Isavia is protected by this move and Icelandic law from such practices.

vfw614 wrote:

If we compare this to a ship. You run a ship and you do not pay your dues in a foreign harbor. Next time that ship calls into that harbor it can be sized, all the same if the owner has changed, the owner gone bankrupt e.t.c.

Again, the analogy does not fit. That's different because there is a lien on the ship for dues the ship has triggered. The aircraft blocked in Iceland is blocked for general debt of its operator that has absolutely nothing to do with the aircraft itself (unless it has flown to KEF before Aug 15 and landing and ATC fees for that specific aircraft are still unpaid) - like airport taxes for passengers etc.

I assume they picked a frame having flown to KEF before August the 15th. And again to not pay the tax you have collected, is a criminal act in Iceland, because those amounts are only in your care.

vfw614 wrote:

According to Icelandic media, airberlin has canceled all flights to Keflavik since the grounding of its aircraft at KEF. Hence the press release by Isavia stating that its actions are limited to the aircraft in question - as apparently a fair number of Icelanders booked on those flights are now stuck in Germany and have difficulties getting back to Iceland, the media have picked up the story....

I suppose the lessors have told AB not to fly any of the leased aircraft to Iceland in fear of grounding the aircraft there.

Is AB rebooking the affected passengers to other airlines, or does this count as "a cancellation due to extraordinary circumstances" under the EU air passenger rights directive?

And again to not pay the tax you have collected, is a criminal act in Iceland, because those amounts are only in your care.

That is not specific to Iceland, that is the same everywhere - and yet no other airport in Europe is blocking third-party owned aircraft operated by airberlin. Are they all dimwits - or did they have better legal advice than Isavia that airberlin simply cannot pay at this point? To pay off any debt accrued before Aug 16 is a criminal act in Germany. A government is a creditor just like anyone else, why should they get preferential treatment?

I suppose the lessors have told AB not to fly any of the leased aircraft to Iceland in fear of grounding the aircraft there.

Not sure. Isavia has stated that they will not touch other aircraft as the outstanding debt by far does not exceed the value of the impounded aircraft.

Is AB rebooking the affected passengers to other airlines, or does this count as "a cancellation due to extraordinary circumstances" under the EU air passenger rights directive?

I don't know about rebookings. At first view, I don't think airberlin could invoke extraordinary circumstances as the situation is in their sphere of responsibility, pretty much like a strike and unlike bad weather.

Except that I didn't just lend my car to the friend but bought a new car for him (because the bank wouldn't give him the credit) and said he could use it as long as he needed to and pay a monthly fee to me. I then allowed him to put is own company name on my car etc. etc. etc. That wouldn't put me in the best of positions if his company goes bankrupt. I simply can't except that an operator walks away from all responsibility and his accomplices making a profit out of it, so hopefully Isavia is protected by this move and Icelandic law from such practices.

Of course. Try to buy a credit-financed car. You can bet your house on the fact that the bank is in the best of positions if your company goes bankrupt because the bank is the owner of the car. There may be some liability tied to the car resulting from the operation of the car by you. But creditors of your company cannot get hold of the bank-owned car for general debt that has resulted from the operation of the company. If it were different, nobody in the world could buy credit-financed cars (or houses or whatever). That is the beauty of collaterals.

If the German laws are like the USA laws, then the administrators have much more latitude in making payments than some here believe.

If the Administrator (or Judge in US Chapter 11) determines that it is best for the creditors' group as a whole, then certain creditors can be given special priority for payment in full.

An example of this is when there is a certain unsecured creditor is a sole source manufacturer for a component, and the company in administration requires more of the components in order to continue operations while in administration. The manufacturing company can refuse to sell the items to the company in administration until all past debts are paid and also insist on Cash in Advance for new shipments. The administrator has no choice but to capitulate or shut down the operations thereby creating more harm for the stakeholders in the administered company. There is no law requiring a company to sell to a company in administration.

There are not that many sole source situations in the world, but precedence has been set in this area.

I expect that KEF will be paid very soon in full by someone, be it the administrator or the leasing company.

It's funny, just because they are a small country, that they have to act like some wild banana republic instead of going the way of everyone else and following EU and the airline countries applicable local law.

The Iceland law does not matter at all in this case. Actually it matters in the fact, that Icelandic laws should have the relevant laws which guarantee that EU law is applicable in such cases. If not, they should not be an EU member.

vfw614 wrote:

Of course. Try to buy a credit-financed car. You can bet your house on the fact that the bank is in the best of positions if your company goes bankrupt because the bank is the owner of the car. There may be some liability tied to the car resulting from the operation of the car by you. But creditors of your company cannot get hold of the bank-owned car for general debt that has resulted from the operation of the company. If it were different, nobody in the world could buy credit-financed cars (or houses or whatever). That is the beauty of collaterals.

But if the car is towed for parking tickets, the bank will still have to pay the tickets and the towing charge to get the car back.

That is the beauty of KEF's position. They are not claiming ownership of the plane, just impounding it to insure payment of amounts due to them under Icelandic law.

CARST wrote:

It's funny, just because they are a small country, that they have to act like some wild banana republic instead of going the way of everyone else and following EU and the airline countries applicable local law.

The Iceland law does not matter at all in this case. Actually it matters in the fact, that Icelandic laws should have the relevant laws which guarantee that EU law is applicable in such cases. If not, they should not be an EU member.

Iceland is not an EU member. Why should they follow German or EU laws?

DLPMMM wrote:

If the German laws are like the USA laws, then the administrators have much more latitude in making payments than some here believe.

This is not the case in Germany. In Germany everyone is equal in front of the law, so no administrator can do foul play.

The is a list, everyone who should get money from the company can apply to be put on the list if they can properly show that the airline owns them certain amounts. The list has a specific ranking which is specified in German insolvency law.

Once the company stops operating, the administrator looks how he can sell the assets or just make the most money of what is left. Once this is done, the cash he has on hand will be distributed EVENLY under the creditors.

So one example, if the administrator has done his job, and there are 40 million Euro on the companies bank account, but the company has claims from creditors as high as 800 million Euro, every one on the list gets five percent of what he should get.

Coming back to this case of ISAVIA illegally holding up ABs plane, they might still get something like 8.000 Euro, in this example case of 5%, they would get 400 Euro in the end. Just a simplified example.


There is no chance the administrator can give them more or pay them now before these proceedings are complete, because (a) all other creditors would have to agree to this (then it would be possible) and this is unlikely and (b) that would be preferential treatment, resulting in the other creditors treated worse than ISAVIA (this would be highly illegal).


And even by all logical means, AB has no more reason to pay. They stop to operate on friday. Then they will be no airline anymore, but a core company insolvency. The airplane then returns to the lessor, who will get it for free from ISAVIA (except if they play the full banana republic game).

DLPMMM wrote:

CARST wrote:

It's funny, just because they are a small country, that they have to act like some wild banana republic instead of going the way of everyone else and following EU and the airline countries applicable local law.

The Iceland law does not matter at all in this case. Actually it matters in the fact, that Icelandic laws should have the relevant laws which guarantee that EU law is applicable in such cases. If not, they should not be an EU member.

Iceland is not an EU member. Why should they follow German or EU laws?

You are right. But afaik they want to join, despite they stopped their first try in 2015. I don't see them staying on their own forever.

CARST wrote:

This is not the case in Germany. In Germany everyone is equal in front of the law, so no administrator can do foul play.

The is a list, everyone who should get money from the company can apply to be put on the list if they can properly show that the airline owns them certain amounts. The list has a specific ranking which is specified in German insolvency law.

Once the company stops operating, the administrator looks how he can sell the assets or just make the most money of what is left. Once this is done, the cash he has on hand will be distributed EVENLY under the creditors.

So one example, if the administrator has done his job, and there are 40 million Euro on the companies bank account, but the company has claims from creditors as high as 800 million Euro, every one on the list gets five percent of what he should get.

Coming back to this case of ISAVIA illegally holding up ABs plane, they might still get something like 8.000 Euro, in this example case of 5%, they would get 400 Euro in the end. Just a simplified example.


There is no chance the administrator can give them more or pay them now before these proceedings are complete, because (a) all other creditors would have to agree to this (then it would be possible) and this is unlikely and (b) that would be preferential treatment, resulting in the other creditors treated worse than ISAVIA (this would be highly illegal).


And even by all logical means, AB has no more reason to pay. They stop to operate on friday. Then they will be no airline anymore, but a core company insolvency. The airplane then returns to the lessor, who will get it for free from ISAVIA (except if they play the full banana republic game).

DLPMMM wrote:

CARST wrote:

It's funny, just because they are a small country, that they have to act like some wild banana republic instead of going the way of everyone else and following EU and the airline countries applicable local law.

The Iceland law does not matter at all in this case. Actually it matters in the fact, that Icelandic laws should have the relevant laws which guarantee that EU law is applicable in such cases. If not, they should not be an EU member.

Iceland is not an EU member. Why should they follow German or EU laws?

You are right. But afaik they want to join, despite they stopped their first try in 2015. I don't see them staying on their own forever.

You said yourself that exceptions can be made by the Creditors (or in the USA, the Creditors' Committee) and that Iceland is not an EU member, and that ISAVIA is acting properly under "Banana Republic" lcelandic laws....

Do you really think that some "future EU membership" that has still not had an Icelandic referendum held yet nor has had any membership application filed for will in anyway hinge on this very minor event? The politicians are not going to get involved at all in this minor commercial skirmish.

The leasing company will probably pay KEF off and take over the KEF claim against the Airberlin estate.

CARST wrote:

except if they play the full banana republic game.

The only country becoming more and more of a banana republic is Germany. Not paying airport fees and letting an airline go bankrupt. Selling fraudulent cars, Deutsche Bank messing around etc. What happened to German reliability? Maybe they should get their act together first before telling other countries what to do.

I've seen this before, at GLA when Zoom went bust, they claimed a 757 over unpaid fees and surrounded it with ground ops vehicles. Why do they even bother doing that ? Have there been cases of pilots sneaking into commercial airports and stealing airliners by stealth ? I know it happens in the general aviation world at smaller fields but surely not possible at a,large commercial field in the west ?

But if the car is towed for parking tickets, the bank will still have to pay the tickets and the towing charge to get the car back.

That is the beauty of KEF's position. They are not claiming ownership of the plane, just impounding it to insure payment of amounts due to them under Icelandic law.

Yes, that's why I said that some liablity may be tied to the car / airplane. But what Isavia is doing is impounding property for debt that in no way is tied to the aircraft owned by BOC. As has been stated, Isavia wants airberlin to pay taxes, security fees etc. for handling passengers in the terminal for flights before Aug 15. Maybe also landing fees for flights operated by airberlin's fleed before Aug 15. It is not about costs (or maybe just a tiny amount if it operated to KEF in the past) linked to that particular aircraft, like unpaid maintenance bills, landings fees etc. As for general debt, it would be perfectly legit to impound any airberlin property for those debts and ultimately turn it into cash, based on a court-ordered sequestration. In principle, they can also impound third-party property in the possession of airberlin simply to create some leverage by disrupting airberlin's operation. Usually, the captain will then produce his company credit card and pay to get going. In this particular case, this leads, however, to nothing, as airberlin does not need the aircraft anymore at the end of this week and cannot lawfully pay Isavia anyway.

The leasing company will probably pay KEF off and take over the KEF claim against the Airberlin estate.

That is the most likely outcome. But BOC will pay to be simply able to lease out the aircraft again, not because they are under a legal obligation to cover airberlin's general debt.

vfw614 wrote:

That is the most likely outcome. But BOC will pay to be simply able to lease out the aircraft again, not because they are under a legal obligation to cover airberlin's general debt.

We agree completely...I never said it was BOC's legal obligation (it is AB's obligation under Icelandic law and AB may be precluded from paying their obligation under German law), but rather that it is probably more cost effective for the leasing company to just pay the bills due after the lease period is finished. Cheaper and quicker than lawyers and courts.

It is rather funny some calling Iceland a banana republic. It is their law, live with it. It is no different here in the US. Any county court judge will block if a local vendor files claim. Yes we are a Cape Town Treaty signatory but constitutional supremacy overrides international treaties.

Read about Centurion cargo planes. AerCap couldn't repo so it negotiated a settlement. They were flying internationally all along including Europe. Brazil impounded for few days.

There is also a Russian IL-78 sitting at a tiny Northern Michigan airport since 2009. Originally impounded for $50K bill, someone cleared all dues, still not able to fly away because it was a decommissioned mid-air refueller converted into a firefighter.

Back to the root cause, because you guys are the experts in squeezing the last drop out of these lemons (troubled airlines) have an escrow account and ask airlines put money for this purpose, pay from that kitty and take your plane.

What will happen if BOC places the aircraft with another operator, the aircraft then is neither owned nor possessed by airberlin and all debts tied to the aircraft itself (landing fees, handling fees) are paid?

vfw614 wrote:

abrelosojos wrote:

= Huh? Again, German law is irrelevant. As stated below:

Saludos,
Alex

German law is absolutely relevant for airberlin. Isavia can park as many snowploughs in front of the aircraft as they want, airberlin, under German insolvency law, is simply not legally allowed to pay debt from the time period before the insolvency proceedings to Isavia (or any other creditor).

And I am pretty sure that this is not a German pecularity, but a universal principle of insolvency law as long as the rule of law stands. Because otherwise, it would give rise to such cowboy antics as shown by Isavia everytime a company is put under adminstration as most creditors would try to extort money from the company under administration at the detriment of other creditors.

Isavia was under no obligation to give airberlin credit in the past. They did and so took the risk at a time when the dire straits of airberlin were well-known. They took a gamble and lost.

= Please do Google how many aircraft have been seized at foreign airports, the applicability of international jurisprudence, and the CapeTown convention. German law applies probably in Germany, and maybe Greece .

Saludos,
Alex

DLPMMM wrote:

The leasing company will probably pay KEF off and take over the KEF claim against the Airberlin estate.

That might happen. Still doesn't make this the right legal way.

RJWNL wrote:

The only country becoming more and more of a banana republic is Germany. Not paying airport fees and letting an airline go bankrupt. Selling fraudulent cars, Deutsche Bank messing around etc. What happened to German reliability? Maybe they should get their act together first before telling other countries what to do.

I'm not disagreeing at all. Germany is in the hand of our large local companies. I think we are one of two or three EU countries which haven't so far brought the European anti-corruption laws into our national law. Which we should have done a long time ago. So don't expect me to defend my country here...

But this doesn't mean that a country like Iceland must act the same way (but seeing their banking and politcal scandals, perhaps nothing else should be expected).

dtw2hyd wrote:

It is rather funny some calling Iceland a banana republic. It is their law, live with it. It is no different here in the US. Any county court judge will block if a local vendor files claim. Yes we are a Cape Town Treaty signatory but constitutional supremacy overrides international treaties.

I'm no lawyer, but AFAIK once a country signs an international treaty they have to adhere to it. And national law bows down to international law. That is why the US never signed to take part in the UN Den Haag court, because they are afraid their soldiers would have to appear in court there. As defendants. So the US accepts this principle of "international law beats national law", but at some points just doesn't take part in the game, when it could be not to their advantage.

And regarding what you say about Iceland, I can't say for sure which treaties they have signed and which not, but every country in the EU and which has signed associating agreements (which Iceland did afaik), accepts the insolvency laws of the country where a company is based in. Again, international law beats national law.

Additionally countries who have signed the Cape Town Treaty accept certain conditions for impounding or better NOT impounding aircraft in cases of insolvency; see "the aircraft protocol".

abrelosojos wrote:

= Please do Google how many aircraft have been seized at foreign airports, the applicability of international jurisprudence, and the CapeTown convention. German law applies probably in Germany, and maybe Greece .

Just see above. You are wrong. It's not really about German or any other specific country. It's just a matter of international law trumping national law.

I realise that Iceland hasn't signed the Cape Town Treaty, but it has an associating treaty with the EU afaik, despite not being a full member or applicant (they were until 2015). So they should follow the same law as everyone else. You don't see AB planes being impounded in all other countries they fly to.

Just some information on these treaties:
- Iceland & the EU: https://eeas.europa.eu/delegations/icel ... 20the%20EU
- Iceland in Europe: https://www.mfa.is/tasks/european-co-operation/
- EEA treaty signed by Iceland: http://ec.europa.eu/world/agreements/pr ... reatyId=26

CARST wrote:

I'm no lawyer, but AFAIK once a country signs an international treaty they have to adhere to it. And national law bows down to international law. That is why the US never signed to take part in the UN Den Haag court, because they are afraid their soldiers would have to appear in court there. As defendants. So the US accepts this principle of "international law beats national law", but at some points just doesn't take part in the game, when it could be not to their advantage.

And regarding what you say about Iceland, I can't say for sure which treaties they have signed and which not, but every country in the EU and which has signed associating agreements (which Iceland did afaik), accepts the insolvency laws of the country where a company is based in. Again, international law beats national law.

Additionally countries who have signed the Cape Town Treaty accept certain conditions for impounding or better NOT impounding aircraft in cases of insolvency; see "the aircraft protocol".

CARST wrote:

Just see above. You are wrong. It's not really about German or any other specific country. It's just a matter of international law trumping national law.

I realise that Iceland hasn't signed the Cape Town Treaty, but it has an associating treaty with the EU afaik, despite not being a full member or applicant (they were until 2015). So they should follow the same law as everyone else. You don't see AB planes being impounded in all other countries they fly to.

Just some information on these treaties:
- Iceland & the EU: https://eeas.europa.eu/delegations/icel ... 20the%20EU
- Iceland in Europe: https://www.mfa.is/tasks/european-co-operation/
- EEA treaty signed by Iceland: http://ec.europa.eu/world/agreements/pr ... reatyId=26

You seem to not understand some very basic legal facts, that even most non-lawyers know.

You are very correct that properly signed and ratified treaties become a form of international law that can trump national law. As you so clearly state: You don't know which ones Iceland has signed that affects this situation. Yet you then also claim that because they have various other agreements with EU countries that somehow they must have signed something that must trump Iceland law in this case.

Iceland has not signed the EU accession agreements which would legally bind Iceland to EU Law and recognition of the German bankruptcy proceedings (that's the one that would affect this case if they had signed and ratified it).

They have signed the EEA treaty... which does not seem to have any bearing on this case as I skimmed its provisions (it allows free trade for most items; sets common general policies in trade, foreign policy, security, and general justice. But, it does not get into a lot of details with strict rules for various situations as does the EU accession agreement). They did not sign the Cape Town Treaty.

They have signed other agreements which have no bearing on this situation at all.

Sorry if this is surprising to you... but, not only is there there is no other international treaty or agreement that they could have signed to negate Iceland law in this case; that is is perfectly OK for nations to set their own laws and for national law to legally apply within the nation it was passed in.

This may be shocking to you... There is no requirement or expectation that any nation sign away their rights to set their own laws; nor an assumption that they will do so. Now in some cases there are advantages to doing so (why certain forms of treaties exists); but, their must be advantages to both sides... that outweigh the disadvantages. The people of Iceland did not want to be in the EU as with advantages there are disadvantages.

So, it fully appears that everything here is perfectly legal.

I am not bothered by national laws, or even the ones like this one as I understand why their existence can be a very good thing.

Have a great day,

To me it looks like you drive your Porsche for lunch to some restaurant one day, eat and when it comes to paying you say you have no money. And the next day you come back and expect them to feed you again?

Folks, you need to distinguish different legal problems that arise from the situation:

1) Insolvency Law: airberlin is bound by German insolvency law and cannot make any payments, regardless what the law of other jurisdictions says. Of course Iceland is not bound by German insolvency law, but it does not change the fact that a German company under administration pursuant to German insolvency cannot make payments in Iceland or anywhere else, even if Icelandic insolvency law would allow a company under administration in Iceland to make such payments.

2) Aviation Law: Isavia can invoke Icelandic aviation law with allows the refusal to "let a plane take off" for non-payment. That is all Icelandic aviation law allows. It is not more than a statutory right of lien.

As can easily be derived, the positions of German insolvency law and Icelandic aviation law are incompatible, so it is a deadlock situation.

3) Icelandic Foreclosure Law: The rules Isavia has invoked are not rules on foreclosure / sequestration. Such rules would answer, for example, the question if Icelandic foreclosure law allows a creditor to sell / auction off the property of a third-party in possession of the debtor to cover general debt not linked to the third-party property (which would be highly unusual from a comparative perspective).

From all what we have heard, the current situation is limited to 1) and 2) and we are not yet at stage 3) Stage 3) requires a legally binding court judgment.

So it is not about whether per se German law or Icelandic law applies, but in what respect it applies.

To me it looks like you drive your Porsche for lunch to some restaurant one day, eat and when it comes to paying you say you have no money. And the next day you come back and expect them to feed you again?

Exactly. That's why, once you have defaulted on your payments, any sound business would not serve you or ask you to produce your credit card before you are served.

CARST wrote:

It's funny, just because they are a small country, that they have to act like some wild banana republic instead of going the way of everyone else and following EU and the airline countries applicable local law.

The Iceland law does not matter at all in this case. Actually it matters in the fact, that Icelandic laws should have the relevant laws which guarantee that EU law is applicable in such cases. If not, they should not be an EU member.

They are not an EU member. Please study a bit more before posting non sense. Thank you

CARST wrote:

I'm no lawyer, but AFAIK once a country signs an international treaty they have to adhere to it. And national law bows down to international law. That is why the US never signed to take part in the UN Den Haag court, because they are afraid their soldiers would have to appear in court there. As defendants. So the US accepts this principle of "international law beats national law", but at some points just doesn't take part in the game, when it could be not to their advantage.

Let me summarize
Where local laws reign supreme lessors are ready for an amicable settlement.
Where a country gives priority to an international treaty like CTT, lessors just repo. Don't give a damn about other parties.

Both India and US are CTT signatories.
Lessors repoed close to 70 frames from India under CTT, airports lost $100M
Same lessors couldn't repo 3x747 freighters from the US because a Florida county judge blocked repo. Vendors got paid and lessors settled.

Some may spin this as, it is up to the lessors whether they want to settle or repo, but history suggests, local laws play a major role in nudging lessors towards settlement.

Hence my support for Iceland's stance.

vfw614 wrote:

Folks, you need to distinguish different legal problems that arise from the situation:

When it suits them, companies are perfectly capable of moving around money to evade the law, taxes, social obligations etc. Of course that would in this case be against the insolvency procedures, but the whole system is messed-up and otherwise it would definitely end up in the wrong pockets so who cares. I would much prefer these things being properly taken care of but until such a time it might be better for Isavia to get their money from "somewhere" so they can release the plane and (after social dues, taxes etc have been payed for) the pigs can sort out the rest among themselves which ever way they want.

Why do you keep referring to the lease company as innocent third-party when clearly they had a contract with AB and should be seen as a second-party or even a first-party since the lease agreement should be seen as a risk carrying / profit generating investment in AB. But of course lease companies have their ass covered and only weaker parties pay the price.

How can airberlin expect others to pay their bill? If this has happened in the past this is one thing. Flying there again and again and expecting to have others pay for you while you are broke seems like overstretching goodwill to me.

PanHAM wrote:

cerealspiller wrote:

This is a classic example of why we have lawyers.

No, it is a classic example of how lawyers justify their existance.

Simple common sense tells us that you cannot hold back an item that belongs to a third party to enforce a payment which i not owed by that third Party.

My guess would be that very little "simple common sense" will be involved with the various legal entanglements involved in this affair. Multiple legal jurisdictions, combined with various international agreements, sprinkled with a dash of bankruptcy law combined with a liberal splash of "posession is 9/10ths of the law" will ensure this is the case. In my experience, when you have at least half a dozen involved parties all with conflicting monetary interests, there is rarely a single view of "simple common sense."

If I were a betting man, I would wager that ISAVIA gets their money before the plane is released. The lost revenue due to that plane being parked and out of service for weeks on end would probably far exceed the amount owed ISAVIA. Makes more sense to get the plane back to earning revenue, while the wheels of justice continue cranking well into 2018 (largely consisting of determining how much the various law firms get paid).

Tomorrow's flights to/from KEF have also been canceled. So the airberlin chapter at KEF is closed. Isavia will have to deal with the lessor to sort out the mess.

VS11 wrote:

vfw614 wrote:

Tomorrow's flights to/from KEF have also been canceled. So the airberlin chapter at KEF is closed. Isavia will have to deal with the lessor to sort out the mess.

If the lessor pays Isavia, how difficult/easy would it be for the lessor to get reimbursed later by the airberlin estate?

At best, they will get pennies on the pound.

Depends probably on whether or not there is a payment bond or any other collateral on the aircraft that still has substantial value. Not sure if such bonds are common when it comes to aircraft leases, though.

The amounts have been paid by Air Berlin, according to this article, and the airplane is free to go.

http://www.mbl.is/vidskipti/frettir/201 ... lugvelina/

In Icelandic but it is possible to use google translate

AFAIK clamping is ot allowed in Germany, KEF Airport should have kown that,

mjoelnir wrote:

The amounts have been paid by Air Berlin, according to this article, and the airplane is free to go.

http://www.mbl.is/vidskipti/frettir/201 ... lugvelina/

In Icelandic but it is possible to use google translate

But I thought it was established fact that there was no way German law allowed this payment and that this was a foolish boorish decision by Iceland that wouldn't work.

ALERT wrote:

mjoelnir wrote:

The amounts have been paid by Air Berlin, according to this article, and the airplane is free to go.

http://www.mbl.is/vidskipti/frettir/201 ... lugvelina/

In Icelandic but it is possible to use google translate

But I thought it was established fact that there was no way German law allowed this payment and that this was a foolish boorish decision by Iceland that wouldn't work.

Isavia probably had better information to go on than some random a.netters.

Today the seized aircraft is finally going to fly-out of KEF to Berlin-SXF. Departure should be around 1500UTC

Kilopond wrote:

I think the Iclandic authorities committed a mistake: they arrested a Singaporean plane that belongs to BOC Aviation. Airberlin couldn't care less, I'm afraid.

Smart idea imo. The leasing company will pay full price. Where the airport may get a % via bankruptcy court.

DLPMMM wrote:

If the German laws are like the USA laws, then the administrators have much more latitude in making payments than some here believe.

If the Administrator (or Judge in US Chapter 11) determines that it is best for the creditors' group as a whole, then certain creditors can be given special priority for payment in full.

An example of this is when there is a certain unsecured creditor is a sole source manufacturer for a component, and the company in administration requires more of the components in order to continue operations while in administration. The manufacturing company can refuse to sell the items to the company in administration until all past debts are paid and also insist on Cash in Advance for new shipments. The administrator has no choice but to capitulate or shut down the operations thereby creating more harm for the stakeholders in the administered company. There is no law requiring a company to sell to a company in administration.

There are not that many sole source situations in the world, but precedence has been set in this area.

I expect that KEF will be paid very soon in full by someone, be it the administrator or the leasing company.

Bankruptcy in the US is at the federal level. To prevent issues like this from arising when a company that has assets traveling to other states being subjected to that states bankruptcy laws. Federal law rules the land so the state of Texas cant impound property for non-payment of a company that resides in Alabama with the courts approval. The EU, if they want to become a more unified economic zone should implement similar laws and have each countries bankruptcy laws scrapped imo.

Elementalism wrote:

The EU, if they want to become a more unified economic zone should implement similar laws and have each countries bankruptcy laws scrapped imo.

I know that geography can be difficult, and politics even more, specially for people from some regions, but what part ot "Iceland is not a country member of the EU" is so difficult to understand?