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Potential severance for LIAT workers in Antigua totals about EC$62 [US$23] million

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Potential severance for LIAT workers in Antigua totals about EC$62 [US$23] million

Unread post by bimjim » Mon Jun 29, 2020

https://antiguaobserver.com/potential-s ... 2-million/

Potential severance for LIAT workers in Antigua totals about EC$62 [US$23] million
-- LIAT (1974) Ltd to be liquidated following shareholder meeting on Saturday, June 27.
Orville Williams
Jun 29, 2020

Sixty-two million dollars is the amount in severance pay that could be owed to LIAT workers in Antigua and Barbuda, depending on the outcome of discussions among the shareholders.

The shareholder governments – Antigua and Barbuda, Barbados, Dominica, Grenada and St Vincent & the Grenadines – met on Saturday to decide the future of the carrier, with Prime Minister Gaston Browne, confirming on local media afterward that the preliminary decision was to liquidate the company.

“The survivability of LIAT is questionable. From all indications, LIAT (1974) Limited is likely to be liquidated. In fact, there will be an annual general meeting of the shareholders to determine the fate of LIAT.

“Antigua and Barbuda’s position is that, whereas we recognise that the four shareholding governments cannot carry LIAT presently…the losses would have increased exponentially, which means that LIAT – which was always in a very precarious position – is literally now inviable. A decision will have to be made potentially to collapse it and then maybe, countries within the region will have to come together to form a new entity,” Browne said.
Speaking on Observer yesterday, leader of one of the other shareholder governments, St Vincent & the Grenadines Prime Minister, Dr Ralph Gonsalves, shared similar sentiments.

“LIAT is going to be put into liquidation. The four major shareholders [on Saturday] received a recommendation from LIAT’s board of directors and we got a summary report. The relevant notices under the law in Antigua will go out, we’ll have this meeting and I have no doubt that the process of liquidation will be proceeded with,” Dr Gonsalves stated.

Amid the discussions ahead of the next shareholder meeting is the potential impact on the hundreds of workers employed with the carrier. On this issue, Dr Gonsalves explained that the severance payments that could be owed to LIAT workers is significantly high.

“The truth of the matter, the unfortunate thing is that LIAT doesn’t have any assets to talk about to satisfy any set of liabilities, including about EC$80-something million worth of severance payments. [For] the workers in Antigua alone, the severance payments are [worth] about $62 million based on the collective bargaining agreement, so it’s big money. [Then], there’s another $10 million or so owed in holiday pay across the LIAT network,” Dr Gonsalves disclosed.

He lamented the position of Prime Minister Browne, expressing, “My partner Gaston has a tough issue on his hands, because nearly 400 employees out of the 600-plus are based in Antigua. It’s a big industry in Antigua [and] it’s a hell of a blow.”

He maintained too, that there is no other option at this point, than to liquidate the company. “There is no other solution. Barbados has made it plain that it has no money to put in and other places are having it very difficult, so there it is, we have to move on,” he said.

Dr Gonsalves also explained that there needs to be a discussion about the options within the region for possibly, a new airline and importantly, what can be done in the short term to maintain travel throughout the sub-region.

“There are some pre-liquidation costs of about $10 million which will have to be dealt with. There are lots of issues, but in the meanwhile, we have to see how people can move. We’re trying to see if we can have a CARICOM-wide meeting…I don’t know what the appetite is across the region – for anything new – so I have to begin with what exists.

“We have CAL (Caribbean Airlines) in Trinidad, we have One Caribbean and we have SVG Air. There’s a group out of Turks and Caicos, they do a lot in the northern region, they come down to Antigua [and] I think they probably reach as far as Dominica.

“We’ll see what assets there are and see what’s the best we can make of these things in the short term, while persons gather steam, to see if they will have another airline. I see my brother Gaston [Browne] is interested in something continuing with the name LIAT…but I have to begin to think about moving people tomorrow morning,” Dr Gonsalves added.

According to Dr Gonsalves, present at Saturday’s crunch meeting were the shareholder governments, along with the Caribbean Development Bank (CDB), the Chairman of LIAT’s Board of Directors, Professor Owen Arthur and the management of LIAT. Observer also contacted LIAT CEO, Julie Reifer-Jones yesterday regarding the outcome of Saturday’s meeting, but her only words were, “I have no comment at this time.”

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Re: Potential severance for LIAT workers in Antigua totals about EC$62 [US$23] million

Unread post by bimjim » Mon Jun 29, 2020

https://www.iwnsvg.com/2020/06/28/liat- ... s-workers/

LIAT owes [EC]$94m [US$35m] to its workers
28 Jun 2020

Bankrupt regional carrier LIAT owes its staff some $94 million in severance and holiday payment, which the chair of its shareholder governments, Prime Minister Ralph Gonsalves, said it is unable to pay.

Gonsalves, speaking on WE FM on Sunday, gave an insight into the financial affairs of the airline, one day after chairing a meeting of the shareholder governments.

During Saturday’s talks, the shareholder governments — Antigua and Barbuda, Dominica and St. Vincent and the Grenadines — decided to liquidate the airline, which has had on-going financial woes.

He said that at Saturday’s meeting, he received a report from the board of directors and the management on the critical financial position of the airline.

“I got a recommendation from the board of directors, particularly on the issue concerning winding up or liquidation and taking the decision for a general meeting of all the ordinary shareholders of the company to consider a resolution for the winding up, dissolution of the company,” Gonsalves said.

LIAT’s scheduled passenger service has been suspended since March as a result of COVID-19.

Gonsalves said the airline was having problems since 2017, but the hurricanes that year put the airline “in a tailspin and into 2018.

“Remember we lost millions of dollars because you couldn’t go to several countries…. So the schedule was gravely disrupted. We lost a lot of money.”

He said that 2017 and 2018 were “very bad years for the airline”.

“In 2019, it lost about EC$14 million. Well, that was recovery of sorts from the hole in 2017 and 2018. And then COVID hits in 2020 and over the period with COVID, we have lost about $35 million. It’s a big sum of money.”

He said that the management sent their salaries for May, June, July and overdue payroll liabilities.

“Because even though they laid off about 500 workers, they kept on a staff of about 168 across the network. Then, for maintenance of the aircraft, insurance, repatriation of staff and health insurance coverage and rental of office equipment, utilities, that number comes up to about EC$10.8 million. And then you have about –their paid booking at May 2020, LIAT had paid bookings of US$4.3 million outstanding.

“Now, these are things which the liquidator would have to deal with. But severance payment in total, for all the workers, as per the existing collective agreements, which is not necessarily what the law of Antigua would specify but I am taking the law of Antigua in relation to insolvency, the number may be smaller, but if you are dealing with just the existing collective agreements, you’re looking at 83.9 million in severance payment and there are people who have vacation pay and for all the countries, it’s another $10 million in vacation pay, so you are talking about $93.9, call it $94 million,” Gonsalves said.

He said LIAT is “insolvent, LIAT doesn’t have any assets to pay anybody anything.

“You see the problem. Now, notice will have to be given to the creditors also so that they can come to the meeting when the meeting is held with the requisite notification. But there are pre-liquidation costs, not dealing with the severance payment because there are some people whose severance is already due, because of the length of time since they have been laid off. They are constructively taken as though they are severed.”

The prime minister said that the Caribbean Development Bank owns three of the aircraft that LIAT operates and has a priority charge on them.

“And then the rest of the planes are leased and in due course they would have to send them back, unless, of course, a new entity which arises leases them from the lessors,” Gonsalves said.

LIAT has 10 aircraft in its fleet, split equally among 48-seater ATR 42-600 and 68-seater ATR 72-600.

The airline services 15 destinations, from Puerto Rico to Guyana.


6 Comments


URLAN ALEXANDER
28th June 2020 at 9:44 PM
Alas! Covid is being blame for gross incompetency. As the chairman among the shareholders with responsibility for LIAT, Ralph has failed miserably and his failure with LIAT goes way back before Covid-19.



ISLANDFLYER
29th June 2020 at 5:39 AM
Without a doubt. And his further comment during the program is showing his naked ambition… “he has 2 airlines” – at Argyle



GI JOE
28th June 2020 at 10:27 PM
Just pay the people them you grossly incompetent Baboons!



NATHAN
28th June 2020 at 11:54 PM
What we should all understand is that LIAT has been trading or not trading whilst it is insolvent and incurring huge losses. By law Directors are personally responsible for losses made whilst trading whilst knowing to be insolvent. The houses and property of the directors, past and present, should be valued and listed asap to ensure they do not purport to sell their assets.

Ralph was overseeing LIAT as chairman of the shareholders,, if things have gone this badly wrong he must be brought to task. He has been warning that the company was insolvent for years so as a lawyer he was aware of the consequences of trading whilst insolvent.

If the shareholders insisted that the Directors continue trading whilst the company was insolvent then the shareholders are responsible.

One thing for sure the employees should group together get a good lawyer and sue, sue, sue.

After writing the above I notice the following

Friday, January 10, 2020 (CMC) – LIAT, named a new Board of Directors

The new Board, was announced, following the airline’s meeting, here, on Monday Jan 6 2020, included former Barbados civil servant, Juanita Thorington Powlett; businessman, Mark Maloney; Michael Holder; Robert Riley; Carolyn Tonge; Lennox Weston; Sir Robin Yearwood; and banker, Isaac Solomon.

The new Board Chairman, former Barbados Prime Minister, Owen Arthur.

LIAT announced, “The new chairman has been tasked, by the board, to undertake a special assignment, to meet with regional prime ministers to discuss sustainability of the airline,” LIAT said in a statement, adding “this assignment will be supported by other directors and the management team of the airline”.

I just hope the new chairman and his board of directors understand the implications of them trading the company whilst insolvent during the last six months, they may be responsible for some if not all the debt during that period. The previous directors are not off the hook either they have been trading an insolvent company for years.

Arthur sorry old bean, seems you have been sold a pup by your friend in a way that is actually an unfriendly act. You may be in line to lose your house, get yourself a good lawyer.



DESMOND MEADE
29th June 2020 at 12:52 AM
One CARICOM



JAMES H
29th June 2020 at 3:47 AM
There is a thing about gross incompetence, eventually we all get to see it when things goes belly up! The new proposal it would appear is to retreat and cover up, rather than admit incompetence, then go back and do the same!

We would not ask a plumber to run the bank why then did they ask this smooth talking politician to run this Airline? …………………… Horses for courses!

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