What Do These Two Gentlemen Know That the Rest of The World Doesn't?-Updated : 20 APR

The "KPMG-Air Georgian" web page has coughed up new documents on 15 APR 2020, and Monday APR 20th, KPMG posted court documents on their website which indicate Justice Hainey approved the request to increase DIP financing to 2.2M and extend the proposal closing until Monday 1 JUN 2020. I have yet to receive from anyone of you riding this any possible explanations for this proposal.

https://home.kpmg/content/dam/kpmg/ca/pdf/creditorlinks/air-georgian/order-dated-april-17-2020-extension-of-time-and-dip-increase.pdf

KPMG Report #3 and a new Motion with return date of Friday April 17, 2020 at 11 am to make oral arguments to the judge.THE MOTION: a) Extension of Time to File a Proposal to 1 JUN 2020 and, b)to increase DIP funding to $2,200,000. 

In February 26, 2020 was the first deadline for the proposal to be completed. The Company was granted an extension of time to file a proposal to and including March 16, 2020. Then on March 16, another extension was approved to 17 APR 2020, and now another 6 weeks is needed?  Lets look at this closely….The PSA allows for the sale to close without the Transportation Licences, further it allows for a Closing with a Transition Services Agreement to specifically address Transportation Licences that have not been transferred, and any other open issues. 

KPMG REPORT #3 dated 14 APR 2020 in PART ….

Update on Sale Transaction 

5.     (e) Since the granting of the orders on March 16, 2020, the parties have continued to work to clear the conditions to closing, in particular working with the many key contract counterparties to either obtain assignments or new contractual arrangements and working through the process for the re-issuance of the licenses with Transport Canada and the other applicable regulatory bodies; 

AUTHOR COMMENT: a) Transition Agreement is in the PSA and clearly anticipated and was intended to be used to address loose ends explicitly including Transportation Licences and ; b) The PSA is clear that closing is NOT contingent on Transportation Licences, which if can’t be transferred go into the “excluded assets” category.  Dear Judge, Please tell Company to use the Transition Services Agreement to deal with these loose ends and perhaps offer an extension of 1 week to allow for a Transition Agreement to be created listing all the loose ends and for Closing, and if its not done by then,  no more waffling…tell them to file for BK.  PS Justice Hainey is being guided by KPMG who continue to support the proposal and recommended the Judge approve the two requests.   

(f) The transaction, the business and the entire airline industry have been impacted enormously by COVID-19 which has caused serious delay in the response time of parties and, as a result, at this time it does not appear that the transaction will close before April 17, 2020; 

AUTHOR COMMENT: COVID was well under way on March 16, in fact the court convened based on COVID rules – a conference call rather than in court appearance.  “Dear Judge, Please tell the parties that the last extension  accounted for COVID delays and the airline industry does not include Air Georgian  as it cannot be affected by COVID business downturn since it has no business to lose and the single charter it has sold in 2 ? months since filing was because of COVID! " PS KPMG continues to recommend to Justice Hainey to support the proposal by approving its requests.

6.     (g) The Purchaser and the Company have agreed to extend the “outside date” under the Sale Agreement from April 17, 2020 to June 1, 2020 pursuant to an amendment dated as of April 13, 2020; 

AUTHOR COMMENT: When is an “outside date” not an “outside date”? “ Dear Judge, Please ask Purchaser for a better understanding of what exactly his plans are for this company given the state of the airline industry today.  A  2-3  year recovery period is expected by many CEO’s of real airlines.”  PS: KPMG continues to ask Justice Hainey to accept the premise that the content of Report 3 remains valid.

Funding 

8.     (h) As set out above, 222 previously agreed to fund the Company up to $2 million which was approved by the Court on March 16, 2020; 

9.     (i) The Company may need to draw the balance of its available funding, plus an additional $200,000 over the extension period; 

10.  (j) The probability of whether this is required depends on a number of factors including the qualification of the federal government’s Canada Emergency Wage Subsidy program and other cost reduction measures; 

11.  (k) 222 has agreed to increase the maximum of Post-Filing Advances by $200,000 to $2.2 million in the event the funds are needed and has also agreed to extend the outside maturity date from April 30, 2020 to June 30, 2020; 

AUTHOR COMMENT: “Dear Judge, Please point put to  Air Georgian’s President and CEO that claiming or applying for Canada Emergency Wage Subsidy when the Company’s business was not effected by COVID in any way, shape or form might be considered unethical or fraudulent and that if so, penalties apply.  Please explain the court expects attention be paid to ensuring participants remain ethical when doing business with the Court.”  PS: KPMG remains convinced that the content of the affidavits by AGL's President and CEO remain sound despite the current airline industry implosion from COVID-19 which reasonably bring into question the veracity of parts of these affidavits given what we know today.

Extension 

(l) The Company is seeking an extension of time to file a proposal from April 17, 2020 to June 1, 2020 and continues to work towards closing and address the rapid changes within the transportation industry; 

(m) the Company is acting in good faith and with due diligence and no stakeholder will be materially prejudiced by the extension; 

AUTHOR COMMENT: I question the extension statements, but the affidavit is the affidavit and its signed!  “Dear Judge, Trust but verify, would you agree its time to verify as this is all so very strange? “ Dear KPMG, Trust but verify. Way much trusting going on when its clear some things no longer can be taken for granted or at face-value.