Letter from the provisional administrator of Swissair Group to contracting parties in long-term debt relations

Küsnacht, Zurich, 1 November 2001. The provisional administrator of Swissair Group, Mr Karl Wüthrich, an attorney-at-law, of Wenger Plattner, wrote as fol-lows to the contracting parties in long-term debt relations on 1 November 2001 (full text):

 

To the lessors of aircraft to Flightlease AG and its subsidiaries and other SAir Group companies under provisional debt-restructuring moratorium.

 

 

Provisional debt-restructuring moratorium - effects on long-term debt relations

 

Dear Sir/Madam

 

Since 5 and 8 October 2001 SAirGroup, SAirLines, Swissair Schweizerische Luftverkehrs AG, Flightlease AG, Swisscargo AG and Cargologic AG have been under a provisional debt-restructuring moratorium. The orders of the competent debt restructuring judges in this matter have now become final.

There are many aircraft leasing contracts in existence between, on the one hand, Swissair Schweize-rische Luftverkehrs AG, Flightlease AG and their subsidiaries as lessees and, on the other hand, various investors and companies as lessors.

It is therefore important that, as the provisional administrator both of Swissair Schweizerische Luftverkehrs AG and of Flightlease AG, I should issue the following statement to you concerning the effects of the provisional debt-restructuring moratorium on these leasing contracts:

 

1.

The primary concern of the administrator must be to ensure that the underlying fabric of li-ability towards creditors of the individual companies is not diminished during the provisional debt-restructuring moratorium.

 

2.

Under Article 310 paragraph 2 of the Swiss Federal Debt Prosecution and Bankruptcy Stat-ute, commitments entered into during the moratorium, with the administrator's consent, con-stitute a privileged claim on the debtor’s assets in the event of a debt-restructuring agreement with assignment of assets or of subsequent bankruptcy.

 

3.

On the other hand, claims against the companies now under provisional debt-restructuring moratorium which derive from leasing or other contracts concluded before the moratorium was granted are non-privileged, unless the administrator expressly subrogates the debtor's assets in such contracts and specifically grants approval of such obligations.

 

4.

As the provisional administrator of Swissair Schweizerische Luftverkehrs AG and Flightlease AG I hereby expressly state that:

  • The assets in debt restructuring are not subrogated in the existing leasing con-tracts (though this decision not to subrogate does not dissolve the contractual relations concerned);
  • I have given no general consent to continued fulfilment of the obligations under such air-craft leasing contracts; and
  • No such approval of the provisional administrator can be inferred from any continued payment of leasing charges since 5 or 8 October 2001; indeed, any such payments are made entirely without prejudice.

 

5.

Therefore approval to commit the debtor’s assets in the terms of the Swiss Federal Debt Prosecution and Bankruptcy Statute Article 310 paragraph 2 only exists with regard to the leasing contracts if I, as provisional administrator, have granted such approval in writing in an individual case.

 

Yours faithfully
The provisional administrator

Karl Wüthrich

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