Court rules in favour of LCI in Waypoint helicopter case
The New York Bankruptcy Court has ruled in favour of helicopter lessor LCI Helicopters (the defendant) in a lawsuit filed by Macquarie Rotorcraft Leasing (the plaintiff) concerning the breach of a non-disclosure agreement (NDA) and the alleged “collusive” bid for helicopters during Waypoint’s bankruptcy proceedings.
The legal dispute between lessors Macquarie Rotorcraft and LCI Helicopters and Waypoint creditor Lombard North Central concerned the bid and sale of Waypoint helicopters taken back by Lombard as collateral following the Waypoint Bankruptcy.
Macquarie had submitted a bid to secure all of Waypoint leasing’s helicopters assets in December last year for $650 million. But three of Waypoint’s lenders filed credit bids to write off debt and take back their collateral (the helicopters) from Waypoint. One of these was Lombard, which had submitted and closed a bid to take back 17 helicopters following the bankruptcy. Lombard then decided to place the helicopters with LCI.
Macquarie claimed that representatives from Lombard and LCI (which had both signed the NDA) discussed the bid and sale of the helicopters whilst the NDA was in effect.
The court ruled that: “There was no evidence that Lombard had shared any confidential information with any servicers, including LCI,” during the bidding process.
“The evidence showed that Lombard had discussed the possibility of a future sale of the WAC 9 Assets with LCI. However, the Court discounted this possible ‘technical violation’ of the Lombard NDA because it did not affect the bidding process.”
Macquarie decided to sue LCI to the tune of $19.5 million in damages for the loss of the helicopters in April, plus a $3 million expense reimbursement. The court has decided to dismissed the case, ruling in favour of defendant LCI.
LCI was not available for comment.
The latest court filing explains the nature of Macquarie’s lawsuit: “The gravamen [the essence of the accusation] of the plaintiff’s claims is that Lombard entered into a secret deal with LCI in violation of the NDA and the bidding procedures to sell it the WAC 9 assets [Lombard’s helicopters] following the consummation of the credit bid.
“In Macquarie’s view, Lombard’s bid was actually a joint, collusive bid by Lombard and LCI that deprived the Debtors of the opportunity to get a higher and better bid, (that) prevented Macquarie from acquiring the WAC 9 assets and deprive it of its break-up fee and expense reimbursement.”