Smartwings has filed a petition with the insolvency court for a judicial reorganization of its subsidiary CSA. Smartwings, which acts as one of the large creditors in the context of insolvency, wants to prevent a situation in which CSA would lose the right to create its own restructuring plan. CSA has been in bankruptcy since March. The fate of the company will be decided by the June meeting of creditors.
CSA filed for bankruptcy at the end of February. The reason is unpaid debts, which according to the company amount to approximately 1.8 billion crowns. At that time, the airline declared their efforts to restructure themselves, which would lead to the rescue of the company. However, the key meeting for the company will be the creditors’ meeting, which is to take place in the second week of June after the assessment of all claims filed for insolvency proceedings. According to the law, creditors have the opportunity to take away a pre-emptive right to reorganize a failing company and decide otherwise if necessary.
That’s what they want to prevent parent Smartwings from doing. They filed for insolvency proceedings as a creditor with a claim of over 350 million crowns. The company therefore stated in the proposal that it is ready to draw up a CSA reorganization plan, in close cooperation with the debtor’s management. Smartwings points out that, in addition to the receivable itself, they are also a key partner of CSA, because they share their air fleet and other equipment, as well as personnel capacity, with them. Both companies are part of the Smartwings Group.
CSA was hit by the effects of the coronavirus epidemic; during the crisis, it had to cancel a large number of connections. In March, the Municipal Court in Prague declared CSA’s bankruptcy at the request of the carrier, in which CSA stated total debts of 1.8 billion crowns. According to the proposal, over a billion crowns of this is a debt to passengers for canceled flights. However, the company’s debt itself can be even higher. The aircraft manufacturer Airbus, based in France, has filed for insolvency proceedings for approximately CZK 17 billion. The carrier refused to comment on the matter.