Peter is this an interesting development? If they cannot make it work financially, what hope for the rest of us….
I know almost nothing about this but am pretty sure that the local councils which own the freehold get the airport back upon the leaseholder going bust. That was a condition in one lease I saw and it has been confirmed to me by someone in one of the two councils involved.
They just don’t want to be operating an airport because it is perceived as being for the rich playboys. That’s why it was leased to Erinaceous Group originally; nobody involved thought Erinaceous were paragons of integrity but nobody else stepped forward with the right promises and as I say the council cannot be seen to be running an airport.
I have seen an article on this. It said something along the lines of: Albemarle Shoreham Ltd had a lease on the lot but as part of the lease they had to do certain works, including terminal renovations. They didn’t, so in a complicated deal Brighton City Airport Ltd, which is not the company that’s gone bust, ended up with a lease on the airport, with Albemarle retaining leasehold control of the industrial areas.
I might be wrong with the details, but I don’t think it will affect the flying part of the airport in any case.
Yes; they failed to do the promised works (it was in the form of £x spent) and there was a provision for a fine (a penalty clause) but the council solicitor let them off it, which many thought was a really bad move.
But that was at least a year ago.
I think this is different.
Edit: thanks Neil for that link. I do wonder who “despite opposition from pilots” refers to? Is it the group which had the old municipal hangar listed to prevent its demolition, at the cost of turning it into a crappy heap in which birds nest and sh*it all over the planes?
QuoteJoint Administrator Simon Underwood said: “We are assessing the situation currently but, as is usual in these cases, our aim will be to maximise as much value as possible for the benefit of creditors."
Don’t you just love it. If he manages to get 2p in the pound for the creditors he will have done a marvellous job. I suspect there will be the square root of nought. The article posted, Too Early to Say, appears to suggest that most of the current operations will be unaffected, which is the good news. The bad news of course is when the next White Night comes charging over the hill, promising to make it busier than Gatwick……Honestly, I have MOL on speed dial 
Although you might criticise the administrator in this situation in fact they have no choice in the matter. Having been appointed as administrators they have a legal responsibility under UK insolvency law to, in the first instance, maximise value for secured creditors. The more interesting question is how you define maximise value in this case.
Secured creditors have their own security. In insolvency the key is the unsecured creditors. Value is simple – how much money do they get.
I wish valuing something was so simple! You make the process sound so easy – it isn’t.
The key is hopefully professionals with no vested interest resolve the impasse the directors of the company have reached. By taking matters out of their hands decisions can be made which might not have otherwise been possible. Unfortunately the costs involved are usually substantial, sometimes arguably out of proportion to the underlying assets which means it is usually the case that the unsecured creditors receive next to nothing.
Resolving value is made harder by the risk of litigation at every step should a chink be left in the armour.
