Skyservice

[gustind]

Alright so rumours had it that Skyservice would be shutting down April 1st. Well today they pretty much told all 1200 employees to clean their desks and leave. Everyone got their pay outs and the commercial aspect of things is pretty much gone now.

http://www.citytv.com/toronto/citynews/ ... ceivership

[yycflyguy]

Yikes. Sorry to hear it. Can anyone explain to me why they didn't file for CCAA before a receiver was appointed? Who is going to control the assets?

[Stoptheworld]

Receivership is the first step of the CCAA process.

A receiver is appointed to deal with (sell) the assets of the company to hopefully satisfy the creditors. This also gives the company time to reorganize and find new investors to take the new company out of receivership.

If the above is not achieved, the company goes into complete bankruptcy and is wound up.

From the sounds of the story, their maybe no hope and the company will just be wound up.

This is truly sad news and my thoughts are with the good people at Skyservice

[Giveitago]

Is this related to Skyservice business aviation and if so how will this affect that part of the operation?

If related, are they run as seperate entities or will a shut down affect both?

Give

[gustind]

Shut down only affects the commercial charter operations associated with tour operators and stuff. Things like the Business and FBO portions remain open.

[Giveitago]

Thanks for the clarification

[yycflyguy]

Receivership is the first step of the CCAA process.

A receiver is appointed to deal with (sell) the assets of the company to hopefully satisfy the creditors. This also gives the company time to reorganize and find new investors to take the new company out of receivership.

If the above is not achieved, the company goes into complete bankruptcy and is wound up.

From the sounds of the story, their maybe no hope and the company will just be wound up.

This is truly sad news and my thoughts are with the good people at Skyservice

Ok. I thought that CCAA allowed for restructuring without the need to sell off assets. If assets are being sold off I thought it was liquidation. I hope for better days for our friends/colleagues at Skyservice.

[scgt]

wuts goin on with this industry?

[JAHinYYC]

Receivership is the first step of the CCAA process.

Legally speaking the appointment of a receiver is not the first step in the CCAA process.

The receiver would have been appointed by the creditors under the authority that they are given under the loan agreements. Basically the bank or finance company has the authority to appoint a trustee (Receiver) to take over the day to day operations and look out for the creditors best interests. Once appointed the receiver can try to re-establish the business, find a buyer or conduct an orderly wind-up as permitted under the credit agreement. From the sounds of it, that is what is happening with Skyservice.

CCAA is a process that the company itself use to stop the debt clock (and prevent the creditors from stepping in as under a receivership) while it tries to sort itself out and re-establish a viable business. This is like US Chapter 11.

Proceedings under the BIA (Bankruptcy and Insolvency Act) mean total liquidation. Once you file for Bankruptcy everything gets sold off and the business is closed. This is like US Chapter 7.

[yycflyguy]

Receivership is the first step of the CCAA process.

Legally speaking the appointment of a receiver is not the first step in the CCAA process.

The receiver would have been appointed by the creditors under the authority that they are given under the loan agreements. Basically the bank or finance company has the authority to appoint a trustee (Receiver) to take over the day to day operations and look out for the creditors best interests. Once appointed the receiver can try to re-establish the business, find a buyer or conduct an orderly wind-up as permitted under the credit agreement. From the sounds of it, that is what is happening with Skyservice.

CCAA is a process that the company itself use to stop the debt clock (and prevent the creditors from stepping in as under a receivership) while it tries to sort itself out and re-establish a viable business. This is like US Chapter 11.

Proceedings under the BIA (Bankruptcy and Insolvency Act) mean total liquidation. Once you file for Bankruptcy everything gets sold off and the business is closed. This is like US Chapter 7.

Thanks. That clarifies the process for me.

[JAHinYYC]

I thought that CCAA allowed for restructuring without the need to sell off assets. If assets are being sold off I thought it was liquidation. I hope for better days for our friends/colleagues at Skyservice.

No, you've got it right yycflyguy.

CCAA allows for a court controled restructuring. Sometimes the business is sold as a going concern, other times it is downsized, refinanced and allowed to resume operations (like AC's last pass).

If all assets are being sold off it is liquidation, usually meaning that management, creditors and the outside receiver don't think there is a viable business to try and keep going.

[Stoptheworld]

Thanks for the clarification JAH. My response was a little over simplified.

It's all over the news now and apparently the Ontario Court has appointed a receiver.

Does anybody know who it is yet?

[JAHinYYC]

Thanks. That clarifies the process for me.

From a working pilot's perspective, under either the appointment of a receiver or CCAA - you might have a job when all is said and done if the business can keep going.

Under BIA the company is a dead duck. Unless you get an offer from the new buyer, employees are SOL.

The fact that Skyservice guys got paid out and THEN the announcement was made - sounds like they are gonzo and the company is no more.

[gustind]

The fact that Skyservice guys got paid out and THEN the announcement was made - sounds like they are gonzo and the company is no more.

To eliminate ambiguity I'll say this plainly. Their commercial division will shut down.

[Clint23]

The Skyservice charter airline filed for receivership and shut down its operations Wednesday.
Citing debt levels and changes in the Canadian vacation travel market, the company cancelled flights out of Toronto's Pearson airport on Wednesday, "as well as all remaining flights scheduled to depart Canada during the balance of the season in April," the company said in a release.
The company flies on behalf of other tour operators from numerous Canadian airports to sun destinations across the Caribbean.
The company has cancelled all remaining outbound flights from Canada. No further flights were scheduled to leave out of numerous Canadian destinations anyway, now that the busy March Break travel season has passed — but many Skyservice passengers may not yet have completed their return legs.
"Skyservice Airlines and the receiver are committed to winding up the business in an orderly and responsible manner," a company release said.
On Wednesday morning, an unnamed secured lender of the company appeared at the Ontario Superior Court of Justice to petition receivership for Skyservice, and a receiver has been assigned to handle the insolvency. The receiver will work with the company and other tour operators to resolve customer and employee issues "promptly."
The closure will result in the loss of 860 jobs. Former employees of the company have confirmed to the CBC that employees were all paid full wages and vacation pay before the shutdown.
Signature Vacations spokeswoman Janine Chapman said her company was prepared to deal with the shutdown of Skyservice operations. Signature has worked with Skyservice in the past, but the company recently linked up with the rival Sunwing fleet of planes.
Sunquest Vacations announced that it has organized replacement flights for all of its customers who might otherwise have been affected by Skyservice's shutdown.
Skyservice normally runs 25 flights a week out of Pearson airport in Toronto alone. Founded in 1986, Skyservice was acquired by a hedge fund in 2007.


Read more: http://www.cbc.ca/money/story/2010/03/3 ... z0jm5dnPhA


That sucks...period. Good luck to all the people, hope they find quality employment in a timely manner.

[Gino Under]

Too many airlines in Canada operating too close to the financial edge anyway.
Best of luck to the 860 affected. (been there, done that)

[slowstream]

Very Sad to hear

Best of luck to all of those affected, hopefully you'll land a new job soon.

[Disco Stu]

How many pilots were on staff as of the liquidation date?

[.......]

Very Sad to hear

Best of luck to all of those affected, hopefully you'll land a new job soon.

Yeah...Maybe Sunwing will offer them a job with their current working conditions???

[Panama Jack]

I am curious to know whether Russell Payson was still CEO of Skyservice Airlines or whether the airline was under separate ownership before these unfortunate events?