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Jetsgo creditor wants Fokkers

From Wednesday's Globe and Mail

An aircraft maintenance contractor owed $3.6-million by Jetsgo Corp. has joined a long list of creditors by seeking a court order to seize up to five of the carrier's Fokker 100s in Quebec City.

In its filing to Quebec Superior Court, NordTech Aerospace (NTA) Inc. is asking for permission to keep the planes in Quebec City, saying it is “incurring additional costs on an ongoing basis for the preservation of the aircraft.”

The move by NordTech came as court-appointed monitor RSM Richter Inc. released lists Tuesday detailing $108-million in Jetsgo liabilities, including claims from 350 creditors owed more than $5,000 and 2,900 creditors owed less than $5,000.

NordTech, including its affiliate ExelTech Aerospace, said it has supplied almost $950,000 in parts and labour for the five Jetsgo-owned Fokkers.

Montreal-based Jetsgo, controlled by aviation entrepreneur Michel Leblanc, sought court protection from creditors on March 11.

Now NordTech wants to be paid $1,000 a day in rental costs for each of the five Fokkers on its premises. “As a result of this situation, [NordTech is] unable to accept or schedule maintenance work for other customers” since the airplanes are taking up space, the Montreal-based company said in its filing to Mr. Chief Justice François Rolland of Quebec Superior Court.

On the night of March 10, hours before the airline announced the grounding of its entire fleet of 15 Fokkers and 14 leased Boeing MD-83s, Jetsgo supervisors directed the bulk of Fokker pilots to fly the aircraft to Quebec City under the guise of maintenance checks. Two additional Fokkers are being used for spare parts.

NordTech said in the court documents that Jetsgo has arranged to sell one of the used Fokkers to Ford Motor Co. for $4.2-million. That price is well above the low-end estimate of $750,000 for a used Fokker needing an overhaul.

Nearly $520,000 has been spent recently on the Fokker earmarked for sale to Ford. NordTech is worried that if the sale to Ford is completed, “the right of retention of NordTech will be lost or, for all practical purposes, become illusory.”

Nav Canada, operator of the country's air traffic control system, and the Greater Toronto Airports Authority (GTAA), overseer of Pearson International Airport, are expected to appear in Quebec Superior Court tomorrow to seek a date to press their own cases to seize some of the Fokkers.

NordTech is also scheduled to ask for a court date, and other airport authorities across Canada are preparing their own legal manoeuvres, said Yves Vincent, a senior partner at Richter, appointed the monitor on March 11.

“Parties are invoking certain rights and they're asking the court to have an opportunity to present their cases to the court,” Mr. Vincent said.

He said the Fokker destined for Ford is parked inside a hangar, while others are parked outside.

NordTech also wants to protect its rights over a leased MD-83 parked in Montreal. Eight of the MD-83s are parked in Toronto, while the rest are in Montreal and Vancouver.

The aircraft maintenance company, which had to lay off 161 employees after Jetsgo's grounding, estimates that the discount airline represented 35 per cent of the revenue of NordTech and ExelTech.

Travel agencies dominate the list of 2,900 creditors owed less than $5,000. They include such names as Gilligan's Isle Travel Ltd. and Boomerang Travel.

Of the 350 creditors owed more than $5,000, the list includes carriers such as American Airlines Inc. and Air Canada, as well as fuel companies, such as Irving Oil Ltd., Petro-Canada and Shell Canada Ltd.

Jetsgo filed for protection under the Companies' Creditors Arrangement Act, blaming Nav Canada, the GTAA and other creditors for putting the heat on it for unpaid bills.

Richter has written a letter to suppliers, advising them of the restructuring process. The Montreal-based monitor said it doesn't know how long it might take Jetsgo to present a plan of arrangement to creditors, but it may be several months away. The court protection is effective until April 11.

Jetsgo, founded in mid-2002, had grown to serve 30 cities in Canada and the United States, as well as flying passengers on tour packages to vacation hot spots such as Mexico and Cuba.

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