In positive news for financiers and lenders, the Irish Government has signed an order which gives immediate effect to the "Alternative A" insolvency provisions of the Cape Town Convention.
The signing into law of the "Alternative A" insolvency provisions has been a key objective of the National Aviation Policy, which we previously reviewed here. The move is a welcome development in maintaining and developing Ireland's successful aviation industry.
The order will be seen as a positive development by lenders in aviation transactions. "Alternative A" will allow creditors take possession of their aircraft quickly in the event that a debtor becomes insolvent. The benefit for creditors is that if a debtor airline leasing an aircraft becomes insolvent, the creditor can obtain possession of their aircraft after 60 days. This effective and speedy remedy will only apply to transactions in the aircraft financing and leasing sphere.
The implementation of these provisions keeps Ireland in line with other jurisdictions and makes it an even more favourable jurisdiction in which to structure and carry out aviation transactions.
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