WILLESTAD – InterCaribbean Airways Ltd. does not have to pay a penalty of $500,000 to bankrupt airline Insel Air, the Common Court of Justice ruled on Thursday. The Court in First Instance imposed this penalty in a ruling dated December 28, 2018 in case interCaribbean failed to provide financial guarantees for the Insel Air’s creditors. When those guarantees fell short, the court refused to approve the creditors agreement and subsequently declared Insel Air bankrupt on February 26.
On November 16, 2018, Insel Air signed a so-called Heads of Agreement with interCaribbean. This agreement is “a binding legal framework for the conclusion of the purchase of the shares in order to safeguard the future existence of the company.”
Insel Air went into receivership on March 14, 2017. Since that time, the company desperately searched for a party prepared to take over or support its operations. In July 2018, the government in Willemstad announced that it had selected the OLG (One Laser Group) investment vehicle as a strategic partner for its troubled airline. The government had already extended a 33 million guilders ($18.4 million) bridge loan to Insel and held 51 percent of the voting rights in the company.
OLG was to make an initial investment of 20 million guilders ($11.2 million). But when OLG failed to provide sufficient financial guarantees, Insel Air had to look for another solution.