Go First lenders seek to take full control of resolution process, replace key bankruptcy officials, firms

Go First lenders have replaced key bankruptcy-related officials who were appointed by the company, and are now seeking to take full control of the airline’s resolution process. The first committee of creditors (CoC) held the first meeting on Friday, where they replaced the company-appointed interim resolution professional, process advisor and legal agency. 

According to a report in The Economic Times, the committee replaced Alvarez & Marsal-backed Abhilash Lal, who the company had appointed, with EY-backed Shailendra Ajmera. The committee is also expected to file for more changes at the NCLT on Tuesday, the report added. 

Alvarez & Marsal is likely to be replaced by EY as process advisor, and J Sagar Associates is expected to be brought in as legal advisor to the committee.

The IRP’s legal advisor, Trilegal, will also be replaced and firms such as Shroff & Co, Luthra & Luthra, and Cyril Amarchand Mangaldas are in the running to replace it, the report added.

A source told the daily that these changes are being made because the lenders are a bit apprehensive about continuing with the same support firms as the ones appointed by the company. 

The committee wants to avoid any conflict of interest, and hence any company or advisor that was even remotely attached to the promoters or management is being replaced, the report stated. 

The beleaguered airline that filed for voluntary insolvency proceedings with the NCLT, has liabilities of Rs 11,463 crore. In its bankruptcy filing to NCLT, Go First said it owes Rs 6,521 crore ($797.38 million) in total to Central Bank of India, Bank of Baroda, IDBI Bank, and Deutsche Bank, which are its financial creditors.   

Meanwhile, the bankers are wary of the delay in resumption of Go First’s operations. They believe that delays will erode public trust and lead to resignations of key employees. Go First has cancelled all flights till June 14. 

Also read: Go First's Committee of Creditors appoints Shailendra Ajmera as resolution professional: Report

Also read: NCLT sends notice to Go First IRP over Delhivery's plea citing its insolvency process as 'fraudulent'