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LIAT 1974 Flying Under the Radar

Barbadian taxpayers have for years acted as lender of last resort for LIAT 1974 Ltd. Since the public and contentious relaunch of LIAT 2020 Barbadians down millions are none the wiser the current state of the deal. The local Opposition parties and other civil society actors appear to be unable to walk and chew gum…

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Barbadian taxpayers have for years acted as lender of last resort for LIAT 1974 Ltd. Since the public and contentious relaunch of LIAT 2020 Barbadians down millions are none the wiser the current state of the deal. The local Opposition parties and other civil society actors appear to be unable to walk and chew gum at the same time. The following questions have been asked by BU Commenter John A on behalf of Barbadians taxpayers. If we do not who will?

– David, Barbados Underground

  • HAS LIAT 1974 LIMITED BEEN LEGALLY DISSOLVED AS OF YET?

  • UNDER THE ARTICLES OF LIAT 1974 LTD ARE THE LIABILITIES SERVICED BY THE COMPANY OR ARE LIABILITIES GUARANTEED BY THE SHAREHOLDING STATES?

  • WHAT IS THE TOTAL ASSET VALUE AS OF TODAY FOR LIAT 1974 LTD AND WHAT ARE ITS OUTSTANDING LIABILITIES?

  • IS THE LIABILITY FOR SEVERANCE UNDER LIAT 1974 LTD NOT A CORPORATE LIABILITY UNDER THE COMPANY ACT AND IS THEREFORE A LIABILITY THAT MUST BE MET BY ITS BOARD OR BY LAST RESORT ITS SHAREHOLDERS BASED ON PERCENTAGE OF SHAREHOLDING?

  • IS BARBADOS A MINORITY SHARE HOLDER IN LIAT 2020 LTD IF INDEED IT EXIST?

  • HAVE CERTIFICATES OF RELEASE BEEN GRANTED TO BARBADOS BY THE CDB AND OTHER FINANCIAL INSTITUTIONS AFTER ANTIGUA ACQUIRED OUR SHARES?

  • AS A CONDITION OF THE SALE DOES BARBADOS HAVE ANY LEGAL RIGHT TO REPAYMENT OF LOANS BY ANTIGUA PREVIOUSLY GUARANTEED BY BARBADOS THAT WERE NOT GRANTED CERTIFICATES OF RELEASE FROM THE LENDERS?

75 responses to “LIAT 1974 Flying Under the Radar”

  1. Artax Avatar
    Artax

    “A corporate entity ‘Under Administration’ does not absolve that entity of any financial responsibilities to its ex-employees who must be treated as ‘Preferred Creditors’ much like any duties and taxes due to the ‘State’ but ranking after those creditors holding security or lien over the assets of the financially dying corporation/company like the CDB.”

    I’m at a loss as to where you’re going with your argument.

    My comment was made in reference to LIAT having to apply for a new flight approval and did not have anything to do with what you’ve outlined in your above comment.

    What you’ve done is use my comment to present a completely different argument.

  2. Miller Avatar
    Miller

    @ Artax:

    That comment was made in relation to the statement that the BGI government ‘thinks’ the following:

    “Apparently, the Barbadian government believes the approval is invalid because, in their opinion, LIAT (1974) Ltd. (Under Administration) is a different entity from the LIAT (1974) Ltd. that existed prior going into administration.”

    It can only become a “different entity” when the old LIAT (1974) Ltd is liquidated and a new corporate entity rises like a phoenix from the flying ashes like a LIAT (2020) Ltd.

    It was not ‘directed’ at any position you took on the matter.

  3. David Avatar
    David

    LIAT still in talks with Barbados and St. Vincent
    https://barbadostoday.bb/wp-content/uploads/2020/05/LIAT-ATR-72-copy-e1600177675437-730×456.jpg

    Article by
    Barbados Today
    Published on
    December 9, 2020
    SOURCE: CMC – The Court appointed Administrator for the cash-strapped regional airline, LIAT, Cleveland Seaforth, says talks are still ongoing with Barbados and St. Vincent and the Grenadines after the two former shareholder governments of the airline temporarily banned the airline from landing at the airports in the two countries over valid flight approvals.

    Seaforth has hinted at the possibility of the Caribbean Community (CARICOM) getting involved in a bid to find an amicable solution to the situation.

    “The latest is that we continue to have discussions with Barbados and St. Vincent and the Grenadines,” he said, adding that in addition to the situation, a situation has arisen in Kingstown surrounding the ground handling operations for the airline.

    “We actually took back on staff, we trained them but the Airport Authority in St. Vincent wants to do the handling and not LIAT and so we are in dialogue with them and my expectation is that with respect to St. Vincent we should have an answer from the board of directors on Friday,” Seaforth said on the state-owned ABS television.

    He said the discussions are continuing with Bridgetown adding “we can’t quite get a response from them as yet.

    “However within the last 24 hours or so CARICOM has approached the company to find out what’s the position and asked to be presented with the information which we did give them, both in respect of Barbados and St. Vincent and my understating it is possible that CARICOM may make some intervention to try and resolve the matter,” Seaforth told television viewers.

    Last Saturday LIAT said it was forced to suspend services to the two Caribbean destinations while it awaits the approval from the relevant authorities there.

    LIAT said prior to its suspension of services in March, it had been operating to Barbados and St Vincent and the Grenadines “on valid flight approvals, which have not expired,” and Seaforth said that in the case of Barbados “it came as a surprise to us” adding that “we are a bit taken aback by the decision we have a valid permit to fly into Barbados until July 2024.

    He said that the Barbados authorities had informed them last week that “we would have to make new arrangements before we could fly into Barbados.

    “We don’t necessarily agree with them because we have the permit which allows us to fly into Barbados until July 2024. We dispatched a letter to them late on Friday asking them to reconsider the decision”.

    Antigua and Barbuda Prime Minister Gaston Browne, has criticised the decision of the former two shareholder governments of the airline to operate schedule flights into their countries.

    “LIAT will succeed, notwithstanding the artificial impediments that these countries are creating,” Browne said on his weekend radio programme in response to the development.

    “The irony is, there were no such requirements for other carriers. All of the other airlines that resumed services to those countries, they had no such requirement so the question is why are they discriminating against LIAT.

    “LIAT is a regional institution within the OECS and the broader CARICOM and it should be given national treatment; not to be treated as some stepchild, but to be embraced as a regional carrier, and if anything, should be given preference, not to be discriminated against,” Browne added.

    https://barbadostoday.bb/2020/12/09/liat-still-in-talks-with-barbados-and-st-vincent/

  4. Mariposa Avatar
    Mariposa

    Like or hate Browne he is a person who takes transparency with all seriousness whether he be right or wrong
    I commend him for the many forthright positions he has taken
    Most barbadians would not appreciate Brownes seriousness when it comes to positioning his utterances on accountability
    Even if he is proven wrong on any issue the fact that he opens freely with the public is a plus which keeps his detractors in fear of him
    He does not hide or mix his words
    Wish the same could be said for the two tag team partners with their sinsters agendas

  5. Artax Avatar
    Artax

    Surely this isn’t the same Antiguan prime minister Gaston Browne you always refer to as a tin horn dictator, when he opposed restructuring of LIAT as proposed by the former Freundel Stuart led DLP administration and tourism minister Richard Sealy?

    NOW, you’re “commending (Browne) for the many forthright positions he has taken?”

    I don’t believe it. Hypocrisy at its best. You don’t have any shame at al, at all, at all.

  6. Mariposa Avatar
    Mariposa

    Yes he does have a tendency to be over zealous and boisterous like tin horn dictators
    However i reiterate that he is very transparent and quick to be accountable to the country.

  7. Artax Avatar
    Artax

    @ John A

    You posted the following comment to another blog:

    “Exactly my point and if Liat is still operating under liat 1974 LTD then we still have major liability issues both financial and legal. Only a formal dissolvement of LIAT 1974 LTD will solve this.”

    Gaston Browne is known to make comments relating to LIAT, which, more often than not, the heads of the other shareholders governments are usually unaware of. He told the media that heads of LIAT’s majority shareholder governments held virtual meeting on Monday, July 20, 2020, during which he was allowed to present a plan for the reorganisation of the airline.

    The heads made a decision to sell the 3 ATR42-600 aircraft that were financed by a CDB US$65M loan and the proceeds from the sale would go towards all the CDB loans that were extended to the governments to support LIAT over the years. It was estimated there would have been a shortfall of approximately US$45M, which was supposed to be shared proportionally by the shareholder governments.

    If that is true, then, it means Barbados is obligated to pay its proportionate share of the outstanding amount due to the CDB. What are the island’s other outstanding commitments incurred on behalf of LIAT?

  8. Artax Avatar
    Artax

    LIAT has some things to sort out – PM:

    The former shareholder countries of LIAT (1974) Ltd have nothing to do with the company’s new structure in Administration.

    And while there is no question that the government of St Vincent and the Grenadines (SVG) welcomes LIAT (1974) Ltd in Administration to operate in the country, there are several administrative things that must be addressed.

    Prime Minister Dr Ralph Gonsalves made these remarks on Monday, December 7, in response to comments made by Antigua and Barbuda’s Prime Minister, Gaston Browne who reportedly said that SVG and Barbados were making deliberate attempts to block the operation of the regional airline.

    Browne’s accusation followed developments that resulted in the airline having to suspend services to Barbados and SVG, which it had previously announced as destinations, while it awaits the approval from the relevant authorities.

    “Now, you cannot however just return an airline like that. There are a number of things that have to be put in place administratively,” Gonsalves said on Star Radio this week.

    LIAT is currently under Administration, with the administrator being Cleveland Seaforth of BDO Antigua and Barbuda.
    The Antigua based airline announced in November the resumption of flights five days a week to seven destinations. And this is the first time that the regional carrier has operated since it suspended commercial services in March due to the COVID-19 pandemic.

    Gonsalves, who is the former chairman of the airline’s shareholder countries, explained that LIAT (1974) Ltd and LIAT (1974) Ltd in Administration are entities with two different governing structures.

    Under the legal process taking place, the airline company has a court appointed administrator and no independent management.

    The Vincentian prime minister gave an explanation of the administrative issues that needed to be addressed before LIAT could fly in SVG once again, since its suspended operation earlier this year.

    He said the management of the Argyle International Airport (AIA) needed to receive formal communication from LIAT (1974) Ltd in Administration to address three things: office space, cargo and ground handling.

    Gonsalves noted that LIAT (1974) Ltd owes the AIA over $9 million, and the country, over $14 million in taxes and other fees, which the government has agreed to write off.

    He said Corsel Robertson, chief executive officer of the AIA informed a LIAT representative that correspondence needed to take place between AIA and LIAT’s company in Administration to work out contracts in relation to office space, cargo and ground handling.

    “They subsequently sent that letter and AIA prepared the contracts and sent them the contracts for the office space, because they had five offices really, now they’re going to have three because they’re a slimmed down operation,” Gonsalves said.

    He also disclosed that “the board said to the management, I didn’t know this, the board said to the management that given the way in which you have…not paid in the past, this new entity or this LIAT in Administration with a new structure, we would like any place where you’re going to rent to pay us two months’ rent in advance”.

    The prime minister said he was informed that LIAT responded that they would pay one month’s rent in advance.

    Robertson indicated that she believes this to be acceptable and that AIA was prepared to agree, once the chairman of the board, Garth Saunders endorses the decision.

    “Is not a lot of money you talking about you know, maybe about $4000,… but the point is this, we don’t want to start – remember we are writing off $14 million you know,” Gonsalves said, noting that all other airlines, including Caribbean Airlines and American Airlines make their payments on time.

    He added that SVG would be foolish to purposely block LIAT from operating in SVG because the country is interested in the traffic with passengers and with cargo.

    “…We are not being unreasonable at all, but it can’t be a freebie. Is the taxpayer who has to pay to upkeep the airport when the services … which are being provided when the facilities are not being paid for by the airlines,” he said.

    Gonsalves said LIAT has since indicated to AIA that the regional airline will continue to do its own ground handling and that is another matter that will be sorted.

    “The point I am telling you, is the people who are giving Gaston the information out of Antigua, are not giving Gaston the correct information about their own tardiness in dealing with matters in a business-like way.”

    LIAT, in a release dated December 5, said the airline has valid flight approvals which have not expired.

    Gonsalves said there is no problem with regard to these approvals, as the Air Transport Licensing Authority have accepted LIAT (1974) Ltd in Administration as the entity as successor to LIAT (1974) Ltd in terms of its permit to come to SVG.

    This permit is issued to all airlines on an annual basis and is scheduled to expire at the end of December.

  9. Artax Avatar
    Artax

    @ David BU

    Gonsalves seems to be suggesting LIAT wants to fly into SVG without making arrangements for its own aircraft handing staff and office facilities.

    LIAT owes Argyle International Airport EC$9M and the SVG government EC$14M in taxes and other fees, which Gonsalves agreed to write off.

    Under those circumstances and the fact that SVG is no longer a shareholder in LIAT, I believe Gaston Browne is being unreasonable, if he wants the airline to operate at the expense of SVG taxpayers.

    Perhaps Mariposa may want to explain to BU what are the “sinister agendas” of Mottley and Gonsalves she alluded to @ December 9, 2020 5:33 PM.

  10. David Avatar
    David

    @Artax

    It is important given what has transpired Barbados does not incur anymore related LIAT debt.

  11. Artax Avatar
    Artax

    At least, Gonsalves had the decency to explained his position on this LIAT issue, while Mia Mottley has chosen to be disrespectful to Barbadian taxpayers and remain silent.

    Since the news ‘broke’ about Gaston Browne’s claims of BGI and SVG were creating “artificial impediments” to prevent LIAT from flying into those territories, the media should have been following the story and asking Mottley questions, rather than relying on reproducing news reports from other news agencies.

    The media is going to sit back and wait until whenever Mottley is ready to address the issue and accept everything she says without asking pertinent questions.

  12. Artax Avatar
    Artax

    @ David BU

    I agree with you.

    Recall all LIAT’s Barbadian employees were terminated by Administrator Seaforth. Although LIAT (1974) Ltd. has facilities at GAIA, there aren’t any agents to check in or out passengers or handlers to deal with cargo and baggage.

    Does Gaston Browne and Cleveland Seaforth expect Barbadian taxpayers should pay employees to provide passenger services such as check-in passengers and baggage, flight gate control, ticketing and flight reservations?

    Perhaps the Administrator should look at outsourcing those services to companies such as Caribbean Aircraft Handling.

  13. Artax Avatar
    Artax

    Gonsalves addressed Gaston Browne’s and Cleveland Seaforth’s allegations that SVG and BGI were creating ‘artificial impediments’ to prevent LIAT from flying into those territory.

    We’re yet to hear anything from the prime minister of Barbados.

  14. Artax Avatar
    Artax

    @ David BU

    “LIAT has been granted permission to fly to Barbados, Prime Minister Gaston Browne has announced. The permission was recently granted.”

    https://antiguanewsroom.com/liat-granted-permission-to-fly-to-barbados/

    I suggest you read the comments section as well.

  15. David Avatar
    David

    Let us wish LIAT 2020 every success.

  16. Mariposa Avatar
    Mariposa

    But why would only Mottley and Gonsalaves put up roadblocks when all of the other nations felt comfortable with the old agreements
    Another reason why these small island nations continue to be divided

  17. David Avatar
    David

    It could have something with the fact Barbados and St. Vincent were exposed to greater liability read write offs.

  18. Mariposa Avatar
    Mariposa

    Reason this issue begs for transparency so there would be no need for second guessing or speculation
    Mia should explain the why’s

  19. Donna Avatar
    Donna

    Somebody needs to put that Browne fellow in his place. I find he wants everything for Antigua at the expense of everybody else.

    A very unreasonable man!

  20. Artax Avatar
    Artax

    @ David

    LIAT’s Administrator Seaforth confirmed SVG’s concerns have been resolved, but a date is yet to be agreed upon for the recommencement of scheduled services to that island.

  21. Artax Avatar
    Artax

    @ David BU

    Are you aware LIAT has suspended flights again? I understand that there isn’t anyone answering its customer service calls.

    I’ve also read about another interesting development, where the ANU government is saying “It’s up to LIAT’s former shareholder governments to foot the bill of outstanding severance payments to severed employees.”

    “In statements from Wednesday’s Cabinet meeting in St John’s, the Office of the Prime Minister said: The Cabinet agreed that a moral obligation exists to pay severance to former LIAT employees throughout the countries where LIAT once operated.”

    What is also interesting is that the Gaston Browne administration enacted legislation that prohibits former LIAT employees from suing the ANU government.

    https://barbadostoday.bb/2021/01/21/over-to-shareholders-for-liat-severance-antigua/

    However, LIAT’s administrator Seaforth comments have made the situation a bit more complicated

    https://barbadostoday.bb/2021/01/29/liat-administrator-warns-of-possible-legal-action-if-regional-govts-do-not-come-to-employees-aid/

    And, do you know who would be first to recoup any losses incurred, if LIAT ‘goes under?’

  22. David Avatar
    David

    @Artax

    You have been following this LIAT fiasco for ever, a new LIAT was under pressure to succeed, with covid it has become harder. Brown will not pay employees, he never intended to, we have known this from the start. Another regional entity gone belly up with others under stress.

  23. Artax Avatar
    Artax

    @ David BU

    I remember ‘saying’ to you that it was a bad idea trying to re-establish LIAT, especially when the only change in its management and operational structures was the appointment of an Administrator, Cleveland Seaforth.

    Then, he and Gaston Browne forced through with limited service to a few destinations, perhaps expecting to regain the market share the airline lost as a result of the closed borders due to COVID-19 and subsequent introduction of other regional airlines to service routes that LIAT previously serviced.

    Browne also probably thought leaders of the other regional territories would have been anxious to invest in LIAT, under terms and conditions as dictated by Antigua & Barbuda.

    This second suspension of flights along with a further retrenchment of employees, maybe the ‘the final nail in LIAT’s coffin.’

  24. David Avatar
    David

    @Artax

    The question remains with the demise of LIAT, how will the regional project be compromised re CARICOM.

  25. Artax Avatar
    Artax

    @ David BU

    People were still able to travel throughout the Caribbean when LIAT was grounded for approximately 7 or 8 months. So, it’s clear pushing that airline as being important to regional integration is a myth.

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