Case Study: CityJet DAC Examinership

11 August, 2020


On 17 April 2020, the Irish High Court appointed an interim examiner, Kieran Wallace of KPMG, to CityJet DAC (“CityJet”) to provide it with protection from its creditors through examinership during the COVID-19 crisis.  Flynn O’Driscoll Business Lawyers acted for creditors of CityJet. 

CityJet is an Irish wet-lease specialist airline operating regularly scheduled routes, principally on behalf of Aer Lingus and SAS. It is owned by Falko, which in turn is owned by funds controlled by Fortress Investment. It employed 1,175 people before the COVID-19 crisis, over 410 of whom were based in Dublin. 

The necessity to seek examinership came about after CityJet’s financial difficulties were exacerbated when its fleet of 34 aircraft were grounded by the COVID-19 outbreak, causing countries around the world to tighten their borders and impose quarantine restrictions on travellers. 

What is Examinership?

Examinership is a process whereby the protection of the High Court is obtained to assist the survival of a company.  Essentially, it allows a company to restructure its debts with the approval of the High Court.  The usual outcome of the examinership process is that the creditor balances are reduced, the assets of the company are protected, investment is obtained and the directors remain in control of the business during the examinership process which is supervised by an expert practising accountant called the examiner.  Examinership is an option available to an insolvent company that enables it to explore all opportunities to provide for its survival.  It is a management friendly process that is inclusive of creditors, customers, suppliers and employees.

The effect of the examinership is that for so long as a company is under the protection of the court:

•  no proceedings for the winding up of the company may be commenced or resolution for the winding up passed in relation to the company;

•  no receiver over any part of the property or undertaking of the property shall be appointed, or, if so appointed before the presentation of a petition shall be able to act;

•  no attachment, sequestration, distress or execution shall be put into force against the property or effects of the company, except with the consent of the examiner;

•  where any claim against the company is secured by a mortgage, charge, lien or other encumbrance or a pledge of, on or affecting the whole or any part of the property, effects or income of the company, no action may be taken to realise the whole or any part of that security, except with the consent of the examiner; and

•  no steps may be taken to repossess goods in the company’s possession under any hire purchase agreement, except with the consent of the examiner.

Interim Examinership Application

In its interim examinership application, CityJet told the High Court that it had debts of €500 million and a net deficit of liabilities over assets on a going concern basis of €186 million.  It said however that there were positive aspects to its current predicament, including that it main customer, SAS, had agreed to support it during the COVID-19 crisis, and that there had been positive engagements with its creditors.  Cost-cutting measures had also been instituted in the hopes of saving “millions of euro”.  It said that while a return to commercial flying was uncertain, it expected that its services would return gradually over the coming months and that its business could make a profit if the examinership process was successful.    

The High Court agreed that an examiner should be appointed to work with CityJet and its creditors and that it would be beneficial for all parties.  The High Court confirmed that it was satisfied from evidence submitted by an independent expert, that despite its current insolvency, CityJet had a “reasonable prospect of survival”, and, if creditors accepted concessions, it could continue trading as a going concern.

 Following the appointment of the interim examiner, the interim examiner had 70 days to put together a Scheme of Arrangement with CityJet’s creditors which, if approved by the High Court, would allow CityJet to continue to trade as a going concern. CityJet’s creditors include the Triangle Group, Investec, the Revenue Commissioners, firms involved in the leasing of aircraft, as well as debts owed to related companies.

 Examinership Extension

On 25 June 2020, the High Court extended CityJet’s examinership for a further 30 days after the examiner told the High Court that he was confident that a Scheme of Arrangement could be put to CityJet’s creditors.  The High Court held that the examinership was progressing and that there had been a positive engagement with a proposed investor in CityJet.

Revenue Position

On 28 July 2020, the High Court was told by the Revenue Commissioners that it would not oppose the application to the High Court for approval of a Scheme of Arrangement.  The High Court heard that the Revenue Commissioners had obtained clarification from the examiner on issues important to it.  The High Court welcomed the clarification regarding the Revenue Commissioner’s position.

Further High Court Hearing

On 29 July 2020, the High Court said that it was minded to approve the Scheme of Arrangement allowing CityJet to successfully exit examinership.  The High Court heard that the Scheme of Arrangement was supported by a majority of CityJet’s creditors and shareholders.  The High Court said that the creditors would do better under the proposed Scheme of Arrangement compared to if CityJet was liquidated.  The matter was adjourned to 11 August 2020.

Approval of the Examiner’s Scheme of Arrangement

On 11 August 2020, the High Court ordered that the examiner’s Scheme of Arrangement was approved with an effective date of 5pm on 11 August 2020.  The High Court also approved any ancillary orders under section 541 of the Companies Act 2014 necessary to effect amendments to CityJet’s Constitution in order for the Scheme of Arrangement to take effect.


The successful outcome of the CityJet examinership secures the stability of CityJet as the aviation market gradually recovers from the COVID-19 crisis.  The outcome highlights the effectiveness of an Irish examinership as a flexible restructuring tool and the efficiency, expertise and experience of the Irish courts in dealing with commercial restructuring solutions. 

Please check our restructuring and insolvency page .

This note is for general information purposes. Legal advice must be obtained for all individual circumstances. Whilst every effort has been made to ensure the accuracy of this note, no liability is accepted by the author or Flynn O’Driscoll for any inaccuracies.


James joined Flynn O’Driscoll in 2007, he became a Partner in January 2014 and was elected Managing Partner in June 2019….

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John graduated with an Honours BCL law degree from University College Dublin in 1994 and was admitted as a solicitor in Ireland in 1997. He has also diplomas in European Law from the Universite des Sciences Sociales, Toulouse and the University of Amsterdam….

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Daniela completed her solicitor training with a leading commercial firm in Dublin where she worked in the areas of medical negligence, construction, corporate and property law…..

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