Recovering a Debt From An Airline is Not Pie in The Sky, Says Shergroup

Recovering a Debt From An Airline is Not Pie in The Sky, Says Shergroup

Recovering a debt from an airline is not pie in the sky, says Shergroup

What do you do when an airline or small charter company owes you money and just won’t pay? The answer, according to leading High Court enforcement specialists Shergroup, is to have a plane seized to pay off the debts.

As the agency responsible for seizing an Air Zimbabwe plane, as well as a WW2 Messerschmitt and a private jet, Shergroup says legal action against airlines or private owners can be successful, if you follow the correct procedures.

Chief Executive Claire Sandbrook, a qualified solicitor, explained there are many practicalities to consider when seizing an aircraft. “Just turning up at the airport and waving your writ of fi fa is not going to get you very far,” she said. “You have to do a considerable amount of groundwork, such as informing the airport authorities and the police, as well as obtaining suitable insurances for those Enforcement Officers who will be going airside.”

In the case of Air Zimbabwe, the state-owned airline had owed almost £750,000 to a multi-national company which specialises in aircraft spares, airliner maintenance, airworthiness checks and airport-based ground crew.

She said: “Air Zimbabwe’s recent record in financial and operational matters was patchy to say the least and in 2011 many of its flights were suspended due to unpaid bills.

“The creditors’ lawyers issued a writ of fi fa to seize any of Air Zimbabwe’s assets available in England and Wales in an attempt to force payment of the debt. This writ was given to Shergroup’s team of highly experienced Enforcement Officers to seize one of the airline’s planes when it stopped at London Gatwick.”

The Shergroup team also had to arrange for security whilst the aeroplane was grounded as well as devise an appropriate storage solution. Officers even had to investigate whether there was the possibility of an unpleasant diplomatic incident, liaising with the Foreign and Commonwealth Office for advice. Mrs Sandbrook added: “We then had to consider that any sale would need to be made by private treaty – with the best will in the world I was unsure whether our local auctioneers would be able to get best price at public sale for a Boeing 767-200ER!”

The first two attempts made by Essex-based Shergroup to seize the Air Zimbabwe plane were unsuccessful. In the first instance, the planned flight to Gatwick had been cancelled after another plane had been seized in South Africa under similar circumstances. The second attempt was thwarted when the plane was forced to divert from its destination due to lack of fuel.

Mrs Sandbrook said: “It was third time lucky and our officers were awaiting the arrival of the plane at 1.40am on a Monday not long before Christmas. After the passengers had disembarked and their luggage taken from the hold, we went through the procedure of formally seizing the aircraft. We learned that the return flight to Zimbabwe had been cancelled in advance, which indicates that the airline knew the plane might be seized.”

Shergroup officers took legal control of the aircraft and posted the necessary notices in the cockpit and elsewhere in the plane, removing the log books and any documentation that the crew would need to fly the plane. The plane was then moved to a quiet and safe part of the airport.

“The entire operation was completed in just over four hours,” said Mrs Sandbrook. “A meeting later that day followed between Shergroup, representatives of the airline and lawyers for the creditors to discuss payment – both to clear the debt and to pay our costs.”

She added: “The matter of payment itself took a good deal longer than may have been hoped for – as well as the financial negotiations, there were complications regarding the plane’s airworthiness certificate. This was bad news for the 150 Zimbabwean passengers who had to sleep on camp beds at the airport while they awaited their flight back to Harare.”

Payment was eventually made in full, including the judgment debt and all the legal and enforcement fees. The passengers flew home on Christmas Day, two weeks after they had been due to return home.

Mrs Sandbrook said: “All in all, this proved to be a textbook example of how to handle an aeroplane seizure and should hopefully give some confidence to other creditors in a similar situation.”

As well as High Court enforcement, Essex-based Shergroup provides a wide range of services from revenue management, debt recovery, transcription and legal services to evictions, security and training, The company, which also has a base in India, has recently expanded to open an office in Florida.