Big Lawsuit
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Big Lawsuit
"The airline currently owes 777 Partners $140 million, most of which is at an 18% interest rate."
https://biv-com.cdn.ampproject.org/v/s/ ... nsion-plan
Lawsuit of the week: Shareholder takes aim at airline's expansion plan
FLAIR SHAREHOLDER CLAIMS COMPANY’S PLANS RAMMED THROUGH WITHOUT APPROVAL, POTENTIALLY PUTTING OPERATING LICENCE AT RISK
July 9, 2021, 12:05pm
A shareholder in Flair Airlines Ltd. is taking the low-cost carrier to court, claiming it’s wrongfully withholding key information about a significant expansion of the company’s fleet of aircraft announced in the midst of the COVID-19 pandemic.
Prescott Strategic Investments LP by its general partner Prescott Strategic Investments Ltd. filed a petition in BC Supreme Court on June 18, naming Flair and Florida-based 777 Partners LLC, a “significant creditor” of the aviation firm, as respondents. Prescott, run by Canadian aviation industry veterans Jim Scott and Jerry Presley, claims in the court filing that the dispute was spurred by Flair’s management deciding to “aggressively expand its operations during a global pandemic” by signing leases on 13 new Boeing 737-8 airplanes with a subsidiary controlled by 777 Partners, also a Flair shareholder.
According to the petition, Flair’s fleet of three Boeing 737s was mostly grounded from September 2020 to April 2021, with the airline using only one for its Vancouver-Edmonton-Toronto route and its Vancouver-Calgary-Toronto route during that time. Prescott owns just under 68% of the airline’s voting shares, and had taken over the company’s management in 2018.
“Shortly after taking over management of Flair, Prescott’s partners became aware that Flair required an immediate infusion of funds in order to pay down a line of credit,” the petition states, a situation which saw 777 Partners sign on as an investor after being approached by Flair. The airline currently owes 777 Partners $140 million, most of which is at an 18% interest rate.
Prescott claims that the COVID-19 outbreak saw Canadian air travel drop by around 90% of pre-pandemic passenger numbers, causing other airlines such as WestJet (TSX:WJA) and Air Canada (TSX:AC) to scale back or halt expansion plans including cancelling orders for their new Boeing (NYSE:BA) 737-8s.
But Flair went the opposite way, announcing in January 2021 that it was leasing more than a dozen new planes for new routes at five Canadian airports, an announcement that “caused serious concerns for Prescott.” Flair hadn’t sought shareholder approval as required for the leases and expansion plans, Prescott claims.
“Because Flair had already begun selling tickets connected to the expanded services, Flair’s position was entrenched and any after-the-fact vote by shareholders would be futile,” the petition states.
Moreover, the company didn’t get approval for the leases from the Canadian Transportation Agency, raising “significant concern” about whether the leases would put the company under control of 777 Partners, which could lead to a finding that it wasn’t “controlled in fact” by Canadians as required by the Canada Transportation Act. Such a finding could strip the aviation firm of its licence to operate in Canada, Prescott claims. Meanwhile, directors of 777 Partners have allegedly threatened to call in Flair’s debt and put it into receivership if it doesn’t proceed with the leases and expansion plans, which Prescott claims are not in Flair’s best interest.
The petition seeks declarations that Flair’s affairs are “being conducted in a manner that is oppressive” to Prescott, and an order for Flair and 777 Partners to buy Prescott’s shares for $0.85 per share.
The petition’s factual basis has not been tested in court, and Flair and 777 Partners had not filed responses by press time.
Copyright © Business in Vancouver. All rights reserved.
https://biv-com.cdn.ampproject.org/v/s/ ... nsion-plan
Lawsuit of the week: Shareholder takes aim at airline's expansion plan
FLAIR SHAREHOLDER CLAIMS COMPANY’S PLANS RAMMED THROUGH WITHOUT APPROVAL, POTENTIALLY PUTTING OPERATING LICENCE AT RISK
July 9, 2021, 12:05pm
A shareholder in Flair Airlines Ltd. is taking the low-cost carrier to court, claiming it’s wrongfully withholding key information about a significant expansion of the company’s fleet of aircraft announced in the midst of the COVID-19 pandemic.
Prescott Strategic Investments LP by its general partner Prescott Strategic Investments Ltd. filed a petition in BC Supreme Court on June 18, naming Flair and Florida-based 777 Partners LLC, a “significant creditor” of the aviation firm, as respondents. Prescott, run by Canadian aviation industry veterans Jim Scott and Jerry Presley, claims in the court filing that the dispute was spurred by Flair’s management deciding to “aggressively expand its operations during a global pandemic” by signing leases on 13 new Boeing 737-8 airplanes with a subsidiary controlled by 777 Partners, also a Flair shareholder.
According to the petition, Flair’s fleet of three Boeing 737s was mostly grounded from September 2020 to April 2021, with the airline using only one for its Vancouver-Edmonton-Toronto route and its Vancouver-Calgary-Toronto route during that time. Prescott owns just under 68% of the airline’s voting shares, and had taken over the company’s management in 2018.
“Shortly after taking over management of Flair, Prescott’s partners became aware that Flair required an immediate infusion of funds in order to pay down a line of credit,” the petition states, a situation which saw 777 Partners sign on as an investor after being approached by Flair. The airline currently owes 777 Partners $140 million, most of which is at an 18% interest rate.
Prescott claims that the COVID-19 outbreak saw Canadian air travel drop by around 90% of pre-pandemic passenger numbers, causing other airlines such as WestJet (TSX:WJA) and Air Canada (TSX:AC) to scale back or halt expansion plans including cancelling orders for their new Boeing (NYSE:BA) 737-8s.
But Flair went the opposite way, announcing in January 2021 that it was leasing more than a dozen new planes for new routes at five Canadian airports, an announcement that “caused serious concerns for Prescott.” Flair hadn’t sought shareholder approval as required for the leases and expansion plans, Prescott claims.
“Because Flair had already begun selling tickets connected to the expanded services, Flair’s position was entrenched and any after-the-fact vote by shareholders would be futile,” the petition states.
Moreover, the company didn’t get approval for the leases from the Canadian Transportation Agency, raising “significant concern” about whether the leases would put the company under control of 777 Partners, which could lead to a finding that it wasn’t “controlled in fact” by Canadians as required by the Canada Transportation Act. Such a finding could strip the aviation firm of its licence to operate in Canada, Prescott claims. Meanwhile, directors of 777 Partners have allegedly threatened to call in Flair’s debt and put it into receivership if it doesn’t proceed with the leases and expansion plans, which Prescott claims are not in Flair’s best interest.
The petition seeks declarations that Flair’s affairs are “being conducted in a manner that is oppressive” to Prescott, and an order for Flair and 777 Partners to buy Prescott’s shares for $0.85 per share.
The petition’s factual basis has not been tested in court, and Flair and 777 Partners had not filed responses by press time.
Copyright © Business in Vancouver. All rights reserved.
Re: Big Lawsuit
Sounds a little like Messers Scott et al are a little miffed. Sour grapes maybe?
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Re: Big Lawsuit
On one hand they argue that 777 Partners cannot hold a majority stake in the airline and then they argue that they should buy them out.The petition seeks declarations that Flair’s affairs are “being conducted in a manner that is oppressive” to Prescott, and an order for Flair and 777 Partners to buy Prescott’s shares for $0.85 per share.
Re: Big Lawsuit
And??On one hand they argue that 777 Partners cannot hold a majority stake in the airline and then they argue that they should buy them out.
No they cant own a majority - but they want nothing to do with Flair anymore and want to be bought out....doesn't really matter who buys them out - they just want out. Not surprising really.
- flying4dollars
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Re: Big Lawsuit
Of course he wants out. He was relieved of his duties to bring SJ in. That was the condition of the financial backing and it was a good decision. Scott was a good guy but he was clueless and the reason the airline was struggling. This article will no doubt fuel the doubters and that's ok. Consensus was Flair wouldn't survive in it's first year with New Leaf. Then it was death by end of 2018. Then certain death during the pandemic. Now what will it be?
There's a few ex jetsgo and C3 pilots here. The optimism here isn't what they had there. Seems to be the recurring story every time I talk to them about it. That kinda makes me feel good. So do the ever increasing load factors.
Also, yes some fares are $49. But do you honestly think that 189 seats are selling at that price and that it's strictly what's paying the bills? Hardly anyone actually pays just that. Add on's are what drives the revenue up. C'mon guys, you have to have figured that out by now....right?
Death by end of 2021? lol...
There's a few ex jetsgo and C3 pilots here. The optimism here isn't what they had there. Seems to be the recurring story every time I talk to them about it. That kinda makes me feel good. So do the ever increasing load factors.
Also, yes some fares are $49. But do you honestly think that 189 seats are selling at that price and that it's strictly what's paying the bills? Hardly anyone actually pays just that. Add on's are what drives the revenue up. C'mon guys, you have to have figured that out by now....right?
Death by end of 2021? lol...
Re: Big Lawsuit
Lawsuit aside a loan at 18% interest isn’t indicative of an airline that’s on solid financial footingflying4dollars wrote: ↑Mon Jul 12, 2021 9:23 am Of course he wants out. He was relieved of his duties to bring SJ in. That was the condition of the financial backing and it was a good decision. Scott was a good guy but he was clueless and the reason the airline was struggling. This article will no doubt fuel the doubters and that's ok. Consensus was Flair wouldn't survive in it's first year with New Leaf. Then it was death by end of 2018. Then certain death during the pandemic. Now what will it be?
There's a few ex jetsgo and C3 pilots here. The optimism here isn't what they had there. Seems to be the recurring story every time I talk to them about it. That kinda makes me feel good. So do the ever increasing load factors.
Also, yes some fares are $49. But do you honestly think that 189 seats are selling at that price and that it's strictly what's paying the bills? Hardly anyone actually pays just that. Add on's are what drives the revenue up. C'mon guys, you have to have figured that out by now....right?
Death by end of 2021? lol...
- flying4dollars
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Re: Big Lawsuit
I honestly don't know what the story is with that but a news article isn't going to be where I get definitive facts from. Especially when it says "these facts have yet to be tested in court"
Re: Big Lawsuit
The facts haven’t been tested in court but that doesn’t change the fact the biggest shareholders are taking the other firm to court to be bought out.flying4dollars wrote: ↑Tue Jul 13, 2021 10:16 am I honestly don't know what the story is with that but a news article isn't going to be where I get definitive facts from. Especially when it says "these facts have yet to be tested in court"
Re: Big Lawsuit
Most lawsuits never reach a courtroom and the intention of the actual suit is often obscure. They are also far more common than most people realize and are utilized regularly to provoke a response or action.
- flying4dollars
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Re: Big Lawsuit
And it also doesn't mean it's going to amount to anything that will change the growth of the businessfish4life wrote: ↑Tue Jul 13, 2021 8:25 pmThe facts haven’t been tested in court but that doesn’t change the fact the biggest shareholders are taking the other firm to court to be bought out.flying4dollars wrote: ↑Tue Jul 13, 2021 10:16 am I honestly don't know what the story is with that but a news article isn't going to be where I get definitive facts from. Especially when it says "these facts have yet to be tested in court"
Re: Big Lawsuit
It could or it may not.
At the very least it will open up discovery and let Prescott have an inside look at how decisions were made. If I was a majority shareholder of a company and a minority shareholder was part of a unilateral decision that has huge risk and possible financial consequences I'd be rightly pissed off as well. Even more so if that minority shareholder directly profited, as they have through the leasing agreement.
At the very least it will open up discovery and let Prescott have an inside look at how decisions were made. If I was a majority shareholder of a company and a minority shareholder was part of a unilateral decision that has huge risk and possible financial consequences I'd be rightly pissed off as well. Even more so if that minority shareholder directly profited, as they have through the leasing agreement.
Re: Big Lawsuit
OH MY GOD AN AIRLINE IS BEING SUED???? NOOOOO WAYYYYYY.boeingboy wrote: ↑Sun Aug 29, 2021 11:52 pm Looks like they are being sued again.....
https://www.castanet.net/news/Kelowna/3 ... m3oRKWS9JI
You seem to do a fair bit of trolling on the Flair forum. You have beef with them or something? You're what, sunwing or the likes? Did you get a pfo from Flair? What is it? They are clearly not going anywhere. No amount of your trolling will change that ya clown
- Daniel Cooper
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Re: Big Lawsuit
Creditors fighting to get paid while they still can. I'm sure Telus isn't the only one they are just trying to get to the front of the line.
Re: Big Lawsuit
rooster wrote: ↑Mon Aug 30, 2021 3:21 amOH MY GOD AN AIRLINE IS BEING SUED???? NOOOOO WAYYYYYY.boeingboy wrote: ↑Sun Aug 29, 2021 11:52 pm Looks like they are being sued again.....
https://www.castanet.net/news/Kelowna/3 ... m3oRKWS9JI
You seem to do a fair bit of trolling on the Flair forum. You have beef with them or something? You're what, sunwing or the likes? Did you get a pfo from Flair? What is it? They are clearly not going anywhere. No amount of your trolling will change that ya clown
In some cases an airline being sued could be a yawn - but one where they either cant or flat out wont pay their suppliers is another story. I'm sorry - troll?...clown?? No beef here, I simply posted what was publicly released. Anything I ever said I have backed up with fact or basic reasoning...what do you have? You must be their chief cheerleader or something.
It's clear by your 12 year old type answer that the truth hurts...or maybe your angry and desperate to keep anything questionable out of view from people.
If I wanted to troll Flair - I could do WAY better than this.
Re: Big Lawsuit
It is a 'who cares' story. Refused to pay my Bell bills years ago becasue they didn't provide the service they claimed they would. Sold it to a credit agency, went to court, 10 minutes later walked out with it cleared as they were full of it. Next.
Re: Big Lawsuit
Is that the newest avcanada insult the kids are throwing around these days?Did you get a pfo from Flair?
What ever happened to you need a checklist to fly a 172?
Liberalism itself as a religion where its tenets cannot be proven, but provides a sense of moral rectitude at no real cost.
Re: Big Lawsuit
LOL @ "If I wanted to troll Flair - I could do WAY better than this" ...give er boss!!! I bet Flair's future rides on your trolling right? God damn moron.boeingboy wrote: ↑Mon Aug 30, 2021 7:34 pmrooster wrote: ↑Mon Aug 30, 2021 3:21 amOH MY GOD AN AIRLINE IS BEING SUED???? NOOOOO WAYYYYYY.boeingboy wrote: ↑Sun Aug 29, 2021 11:52 pm Looks like they are being sued again.....
https://www.castanet.net/news/Kelowna/3 ... m3oRKWS9JI
You seem to do a fair bit of trolling on the Flair forum. You have beef with them or something? You're what, sunwing or the likes? Did you get a pfo from Flair? What is it? They are clearly not going anywhere. No amount of your trolling will change that ya clown
In some cases an airline being sued could be a yawn - but one where they either cant or flat out wont pay their suppliers is another story. I'm sorry - troll?...clown?? No beef here, I simply posted what was publicly released. Anything I ever said I have backed up with fact or basic reasoning...what do you have? You must be their chief cheerleader or something.
It's clear by your 12 year old type answer that the truth hurts...or maybe your angry and desperate to keep anything questionable out of view from people.
If I wanted to troll Flair - I could do WAY better than this.