Nordic Aviation Group (NAG) filed a bankruptcy petition with a court on Friday, for the Nordica and Xfly airlines.
Temporary bankruptcy trustees have been appointed to oversee airline Nordica.
The court has at the same time imposed restrictions on all transactions involving Nordica’s assets.
In the near future, the court will also appoint a temporary bankruptcy trustee for Xfly.
According to the court, the company still holds €38 million in liabilities after the value of its assets has been deducted.
During the bankruptcy proceedings, both the value of the company’s assets and its debts may change.
With the bankruptcy declaration announced last Friday, Nordica’s daily economic activities ceased, meaning payments, information disclosure, and assumption of obligations are now severely limited.
Up to now, Nordica had focused on preparing the bankruptcy application and preventing further losses to creditors.
The company has stated that all creditors, employees, aircraft lessors, customers, and service providers alike, have been treated equally.
The airline, together with the Unemployment Insurance Fund (Töötukassa), has begun a collective redundancy process.
The fund is to assist employees directly employed by the airline in obtaining the benefits they are entitled to.
Contracted staff, meanwhile, can either continue providing services to other airlines or file for bankruptcy themselves.
The temporary bankruptcy trustee will then submit an application to the Unemployment Insurance Fund on behalf of the employees, to secure bankruptcy compensation in respect of unpaid wages and other legally mandated amounts.
Leased aircraft have been returned as required, including those belonging to aviation assets manager Transpordi Varahaldus.
These aircraft have been brought back to Tallinn Airport.
The wholly state-owned Nordica announced its bankruptcy on Wednesday, November 20, after a potential private sector investor backed out of a deal.
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