This was the situation that was facing a
particular creditor and their lawyers - and of
course it was an easy call to make. Send for Shergroup.
Chris Bell, Shergroup Policy Advisor and Head
of Public Affairs, tells the story of what happened
in the aftermath of a frantic call from lawyers
acting for a judgment creditor with a delicate
problem.
The background of the situation was this. An American-based
multi-national company specialising in providing
aircraft spares, airliner maintenance, airworthiness
certification checks and airport-based ground
crew was owed a sum totalling almost three-quarters
of a million pounds by a certain African airline.
Having obtained judgment in their local courts,
however, the creditor company had still not been
paid, and the creditor and their lawyers were
desperately searching for a way to get their judgment
enforced.
It became clear that this was not going to be
an easy task, however, once the background of
the case was fully investigated - not least because
the debt was owed by Air Zimbabwe. For those who
don't know, Air Zimbabwe is a company fully owned
by the Zimbabwean Government - and its recent
record in financial and operational matters was
patchy to say the least.
In early 2011 it was estimated that the company's
debts totalled approximately $US140m. In February
2011 flights to Johannesburg were suspended over
the threat of likely impoundments of its planes
by creditors due to a series of unpaid debts.
The airline's regional and domestic services were
suspended for a short period in May 2011 following
the grounding of part of its fleet over serious
maintenance concerns. Operations resumed in late
May 2011 but then in mid-June 2011 flights to
London and South Africa were again temporarily
suspended because of an unpaid and long overdue
debt with fuel suppliers. Some flights resumed
in early July 2011, but the airline halted operations
again in late July 2011, this time due to a pilots
strike. Operations resumed after the strike was
concluded in mid-September, but overseas and domestic
flights were temporarily cancelled again in early
November 2011, this time owing to another unpaid
debt with fuel providers. Flights to overseas
routes only resumed on 11 November 2011.
Then,
of course, there was the sensitivity of dealing
with a company such as Air Zimbabwe and a government
such as the Zimbabwean Government. Everyone will
know that relations between the respective governments
of the UK and Zimbabwe have not been good, to
say the least, for a number of years now. Faced
with this situation, the lawyers decided there
was only one option - issue a writ of fi-fa against
the debtor company and seize any of their assets
available in England or Wales in an attempt to
force payment of the debt - with the threat that
the items seized would be sold to clear the debt
if no payment was forthcoming.
But where would one find an asset suitable for
securing and potentially clearing such a substantial
debt? There was only one answer to that particular
conundrum - get the writ to Shergroup as quickly as
possible and get Claire and the TEAM to use their
knowledge and expertise, based on years of experience
in such matters, to seize one of Air Zimbabwe's
aeroplanes next time one was in the area.
That may sound easy - but with Air Zimbabwe's
set up and recent record, this was far from the
case. And for the person whose name was going
to be on the writ itself - in this case, Shergroup
CEO Claire Sandbrook - there was going to be a
very heavy burden of personal responsibility for
ensuring that everything went smoothly.
Such is the parlous state of the company's finances
and the nation's infrastructure that its entire
airworthy fleet currently consists of only 7 aircraft,
most of which were bought in the late 1980s -
attempts to buy new planes having all been scuppered
due to the company's lack of money. The airline
now only serves 9 destinations (3 in Zimbabwe
itself and 6 overseas, including London Gatwick)
and is currently only scheduled to fly in and
out of Gatwick once a week - on a Sunday.
The
practicalities of seizing an airliner should not
be underestimated. Just turning up at the airport
and waving your writ of fi-fa around is not going
to get you very far. A considerable amount of
groundlaying needs to be done first. The airport
authorities and the police need to be informed.
Suitable insurances needed to be obtained - particularly
for those officers who would be going 'airside'
- something which would require close liaison
between Claire and her insurers, who would clearly
not provide any such insurance without being absolutely
convinced that she personally had everything under
total control.
Security would need to be arranged to ensure the
aeroplane was kept secure whilst on the ground.
Arrangements also needed to be made with the airport
authorities for storing the aeroplane once it
had been seized - the cost of which was something
that involved lengthy calculations as storage
costs are based upon a formula that includes interesting
technical items such as the maximum weight the
aeroplane is allowed to safely fly at and whether
the aeroplanes engines are of a type that will
need regular firing up to keep them in good working
order.
With the debtor being Air Zimbabwe, there was
of course a need to consider whether we should
liaise with the Foreign and Commonwealth Office
to ensure that our actions would not cause a diplomatic
incident. With the flight scheduled to arrive
(and therefore the seizure possibly needing to
take place) on a Sunday, there was also a need
to get the necessary advance judicial authority
to enforce the writ on a Sunday. And there was
a need to anticipate the possibility that any
sale would need to be made by private treaty -
with the best will in the world we were unsure
as to whether our local auctioneers would be able
to get best price at public sale for a Boeing
767-200ER!!
And
of course this all had to be carried out with
a certain amount of secrecy. If Air Zimbabwe got
sniff of the possibility that they had a likely
seizure of one of their aircraft on their hands,
then almost certainly the flight would be cancelled
and the chance to execute the writ would be gone.
This even went so far as to forbidding the words
'Air Zimbabwe' or 'Boeing 767' from being mentioned
in the office outside of certain rooms and situations
- for some unknown reason the code name 'Bette
Midler' was adopted - don't ask me why, it just
was.
Of course, with such an operation not everything
is likely to go exactly to plan - if such tasks
all went smoothly every time then any old enforcement
company could do it and you could put any HCEOs
name on the writ and still be guaranteed a result.
Indeed, our first attempt to seize one of Air
Zimbabwe's aircraft was abortive. Everything had
been ready to go with a planned seizure one Sunday
in early December - only for the flight to be
cancelled. It transpired that the day before one
of their planes had been seized in Johannesburg
in very similar circumstances - as a result of
which Air Zimbabwe temporarily stopped all overseas
flights until that particular matter was resolved,
including ours.
A second attempt later that week was similarly
cancelled at the last moment after a chartered
flight heading for Gatwick was forced to divert
due to a lack of fuel.
But as the old saying goes, all good things do
indeed come to those who wait, and it was truly
a case of third time lucky. A week after the original
planned seizure - and again after some rather
nerve wracking delays to the incoming flight threatened
to jeopardise the whole operation - an Air Zimbabwe
airliner touched down at Gatwick Airport at approximately
1-40am on the Monday morning.
And Shergroup authorised officers David Asker
and Chris Badger were there awaiting its arrival!!
After the passengers had disembarked and their
luggage had been taken from the hold, an official
from the airport authorities took the officers
onto the aircraft, and after a brief exchange
of pleasantries and formalities with the pilot,
the officers went through the procedure of formally
seizing the aircraft.
The pilot was utterly charming - one may assume
that this wasn't the first time that this had
happened to him, landing a plane only to find
judicially appointed officers from the country
of arrival awaiting his touching down and wanting
to seize the plane in lieu of judgment debts owed
by the airline. It was also noticeable that an
official from the airline was awaiting the arrival
of the flight and he went into a hasty conflab
with the pilot and crew as soon as the plane arrived.
The return flight to Harare had also been cancelled
in advance, which perhaps indicates that the airline
knew there may be some sort of trouble brewing
prior to the flight arriving at Gatwick.
An initial inspection of the aircraft indicated
that although it was just about airworthy, it
was showing signs of considerable wear and tear.
The exterior paintwork had been spruced up during
a refit a couple of years ago - the aircraft was
bearing Air Zimbabwe's new colour scheme and markings
as a result - but as the aircraft was about 22
years old and had alot of mileage on the clock
it was understandably suffering from fatigue.
Certainly the presence of numerous reels of duct
tape at various points around the aircraft caused
eyebrows to be raised.
The interior was fairly basic and tolerably clean,
but the cockpit and crew areas had seen better
days - it was all painted in a utilitarian shade
of brown but much of the paintwork was chipped
and the flight deck looked positively ancient
compared to what one would expect from a more
modern airliner. The red plastic coathangers on
which the crew hung their jackets during the flight
gave the cockpit a homely touch, but other than
that the surroundings were very plain and a wee
bit grim.
Having taken legal control of the aircraft and
posted the necessary legal notices in the cockpit
and elsewhere on the plane, and removed the log
books and other documentation without which the
aircraft would not be allowed to fly and handed
them to the relevant airport authorities for safe
keeping, it was then moved to a suitably quiet
and safe part of the airport out near the perimeter
where it was to remain parked pending the outcomes
of discussions between the airline, the creditors
and their lawyers. The entire operation was completed
in just over 4 hours and the officers were able
to leave site and get some welcome shut-eye at
6am.
Matters weren't allowed to stand still, however,
and a meeting was arranged at the airport for
4pm that afternoon with representatives of the
airline and lawyers representing the creditor
company to discuss the small matter of payment.
This was not as straightforward as it may sound
as there had to be regular breaks in proceedings
for the airline representatives to take instructions
from what was euphamistically referred to as 'our
shareholder' - whether that meant Mr Mugabe himself
or merely someone else high up in the Zimbabwean
government or at the Zimbabwean Embassy was never
exactly made clear. But at the end of a long but
polite and largely constructive meeting, progress
towards arrangements for payment being finalised
had certainly been made.
It was now time to sit back and await developments
- and hopefully payment. This process took a good
deal longer than may have been hoped for - especially
for the 150 or so Zimbabwean passengers awaiting
the flight back to Harare. Unfortunately they
faced the prospect of several days sleeping on
camp beds at the airport whilst the airline arranged
for the judgment debt and Shergroup's costs to
be paid. It was hard not to feel sorry for them
as the negotiations ebbed back and forth over
what would be an acceptable method of payment
and when the aircraft would actually be released
back into the possession of Air Zimbabwe. In these
negotiations we, of course, continued to hold
the upper hand - without the necessary documentation
such as the log book, the plane could not fly
anywhere, and it was made abundantly clear that
those documents would not be released until payment
had been satisfactorily made.
And that wasn't the end of the problems for Air
Zimbabwe. By the time payment could be arranged,
the aeroplane's airworthiness certificate had
expired - needless to say, the maintenance teams
at Gatwick were unwilling to carry out the necessary
checks unless payment up front was forthcoming.
Similar issues arose from checks carried out on
the plane by a specialist aircraft evaluation
team - in particular a hydraulic failure in the
landing gear was giving them great concern and
would require sorting before the plane would be
allowed to fly home.
The constant delays and cancellations of any possible
return flight did little for the humour of those
poor people stranded at Gatwick, and indeed on
at least one occasion the police had to be called
to help defuse the situation.
But in the end, it all came good - payment in
full, not only of the judgment debt but all legal
and enforcement fees as well. It was rather a
nerve wracking time waiting for the payment to
arrive but there was a palpable sense of relief
and elation when payment dropped into our account
just a few days before Christmas. What a way to
celebrate the festive season, with a result such
as that!!
All that was now required was to go through the
final formalities of handing custody of the aircraft
back to the pilot, and then arrangements could
finally be made for some very tired and weary
Air Zimbabwe passengers to finally begin their
journey back to Harare. They hoped to be back
in time for Christmas - although it didn't quite
work out that way. As mentioned before, during
its spell on the tarmac at Gatwick the plane's
airworthiness certificate had expired and considerable
maintenance and repair work was required to get
it back into a fit state to undertake the flight
back to Zimbabwe. This was eventually completed
and the flight back finally left on Christmas
Day, with the passengers at long last getting
back to Harare on Boxing Day - 2 weeks after they
had been due to get back home.
All in all, a textbook example of how to handle
such a seizure, and a fabulous advertisement for
the professionalism of those Shergroup officers
and staff who were involved in dealing with this
case. Despite a lot of scope for things to go
horribly wrong, strong case management, exceptional
powers of persuasion and the tenacity to see things
through won out. Perhaps the most notable aspect
of the operation was that all dealings with all
the various parties were carried out in a very
friendly manner with no hint of rancour or unpleasantness
- a great achievement considering the amount involved
and the tensions that could have bubbled over
with regard to issues such as the passengers having
to sleep in the terminal at Gatwick Airport.
Certainly the links we have built up with a major
creditor such as this, and with the authorities
at Gatwick Airport, will have done the Shergroup
brand nothing but good.
And so now you know the answer - if you've got
a plane that needs seizing, who ya gonna call?
