The German administrators Niki have withdrawn their opposition to the airline’s bankruptcy being conducted in Austria and opened secondary proceedings in Germany.
The move, announced on 25 January, will allow the insolvent carrier’s founder, Niki Lauda, to complete the purchasing of its assets – a deal that was backed by creditors last week.
“Withdrawing the appeal was a prerequisite so the transaction of Niki could take place,” Niki’s German administrator, Lucas Flöther of Flöther & Wissing, told ALN’s sister publication Global Restructuring Review. “With time pressing, and the deal as well as the jobs of the Niki employees at risk, this was an obvious and pragmatic decision.”
Flöther’s announcement signals the beginning of the end of a lengthy dispute over where Niki should be allowed to conduct its bankruptcy, which has been playing out since December when Niki began filed in Berlin.
In the weeks that followed Niki’s petition, International Airlines Group (IAG) – which owns a host of carriers, including British Airways and Aer Lingus – agreed a deal to buy Niki’s assets and inject €16.5 million to pay for the company’s running costs.
But the deal stalled as the passengers’ rights group Fairplane challenged the decision to hear the case in Berlin, arguing passengers had a better chance of recovering more than €1 million if the proceedings took place in Vienna.
The Regional Court in Berlin allowed the appeal on 8 January and ruled the case should be heard in Vienna, where Niki had its centre of main interests.
The next day, Flöther said Niki would be lodging an appeal. Yet on 12 January, following another petition brought by Fairplane, the Regional Court of Korneuburg opened main insolvency proceedings in Vienna.
After Lauda’s successful offer won over Niki’s creditors following a second round of bidding in Vienna, only Flöther’s appeal against the Berlin court stood in the way of the transaction being finalised, leading him to take an “obvious and pragmatic decision” to withdraw the complaint.
“The most important thing was to find a quick solution that would save the deal and the jobs,” Flöther told GRR, “not the academic question of the right jurisdiction.”
“This was very clear from the start and was also part of the cooperation agreement I entered with the Austrian administrator,” he added.
Flöther has also launched secondary insolvency proceedings in the Charlottenburg District Court, under the European Insolvency Regulation.
Taking to Twitter following the announcement, Annerose Tashiro, head of cross-border restructuring at German firm Schultze & Braun, said it was “unfortunate” that the German Supreme Court or the European Court of Justice will not issue a decision on Niki’s COMI, but acknowledged the clarity “is good” for investors and creditors. Counsel to Niki
- Graf & Pitkowitz
Partners Stefan Weileder and Alexander Isola in Vienna
Counsel to Fairplane
- Voigt Salus
Partners Joachim Voigt-Salus and Oliver Sietz in Berlin, and Thomas Ellrich in Cologne
- Kosch & Partner
Counsel to IAG
Partners Andreas Kloyer and Christian Rodorff in Munich, Susanna Fuchsbrunner and Andrea Metz in Frankfurt, and Helmut Janssen in Brussels
- bpv Hügel
Partners Elke Napokoj, Stefan Gaug, Michaela Pelinka and Christian Schneider in Vienna, and Bernhard Schatz in Baden