RIGA - Continuing review of a lawsuit that former head of the national airline airBaltic Bertolt Flick has filed against Latvijas Krajbank and Latvia’s Transport Ministry, Riga Regional Court has temporarily arrested the state-owned shares in airBaltic, reports LETA.
According to the court’s press secretary Aigars Berzins, the court’s decision cannot be appealed.
Flick’s attorney Viktors Tihonovs also confirmed to LETA that the court had ordered airBaltic shares arrested, adding that the airline has been banned from increasing its share capital.
Tihonovs previously said that, pursuant to the government’s agreement with banks and airBaltic creditors, reached on Oct. 3, 2011, no deals were supposed to take place with airBaltic shares until Dec. 31, 2012. However, the state violated the agreement by buying 47.2 percent of airBaltic shares from Krajbanka, which Flick had used as security to take out a loan from the bank, and thus the state became owner of 99.8 percent of airBaltic shares.
“The shares belonged to Baltijas Aviacijas sistemas, which in turn belonged to Flick, and the shares were the security that Flick offered to banks to guarantee that he would honor his obligations. It is but logical that, if the main asset put up as security is sold in violation of the agreement, such a transaction must be ruled void,” said Tihonovs.
In the meantime, the Regional Court has postponed review of an 70 million lats (100 million euros) airBaltic lawsuit against Flick until Dec. 10. AirBaltic is demanding more than 20 million lats from Flick and 50 million lats from the company that insured Flick’s liability.
AirBaltic previously informed Nozare.lv that the proceedings were launched over Flick’s harmful activities as the airline’s sole board member, such as signing unfavorable contracts and assuming fictitious liabilities against Investbank.
The proceedings were also started over spontaneous and unjustified flight cancellations without duly warning airBaltic passengers, abuse of power, when Flick signed contracts with his own and affiliated companies, essentially skimming funds from the company, malevolent manipulations of airBaltic brands, divulging commercially sensitive data on the airline and its employees to third parties on questionable conditions, and damaging the airline’s reputation – basically running the airline as his personal bank account, and into the ground.
Flick quit airBaltic in the fall of 2011 after it became apparent that the airline’s losses had reached a record-breaking amount. The airline’s current CEO Martin Gauss said that airBaltic operated with a loss of 77 million lats in 2011.
The Riga Regional Court’s decision to arrest state shares in the airline will have no impact on the airline’s daily operations and the process of finding an investor for the airline, said the Transport Ministry.