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CHC Group seeks approval of Commonwealth Bank of Australia settlement
By Caroline Salls
Pittsburgh, Feb. 1 – CHC Group Ltd. requested court approval of a settlement reached with Commonwealth Bank of Australia (CBA), according to a motion filed Tuesday with the U.S. Bankruptcy Court for the Northern District of Texas.
The company said CBA provided its Australian subsidiaries with various banking and financial services, but the subsidiaries “migrated their banking relationship to another financial institution,” other than A$4.26 million in performance guarantees related to aircraft leases, as well as three helicopter leases.
As a result of, a dispute over the terms under which these three leased aircraft were to be returned to CBA, CHC said the bank filed A$7.81 million in claims against CHC Australia.
According to the motion, CBA and the Australian debtors disagree about the amounts that CBA is claiming, the forum for resolving this dispute, the applicability of the automatic stay under the Bankruptcy Code to prevent CBA from taking action against the Australian debtors and the ability of CBA to set off performance guarantees.
Under the proposed settlement, CBA will accept a A$2 million payment apportioned for reimbursement of inspection costs and A$1.56 million related to an asset value guarantee.
In addition, CBA will hold A$700,000, which had previously secured a guarantee in favor of Ambulance Australia. Upon payment of the settlement sum to CBA, CBA will repay that A$700,000 to CHC may choose to apply the sum in partial payment of the settlement amount.
A hearing is scheduled for March 3.
Based in Richmond, B.C., CHC is a commercial helicopter operator. It filed for Chapter 11 on May 5, 2016 under case number 16-31854.
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