THE PILOT training school whose students were left stranded in the US will receive fresh investment to fund a survival plan only if the contracts of all its 350 students are cancelled, the High Court heard yesterday.
Last July, the High Court confirmed the appointment of Michael McAteer as examiner to the Waterford-based Pilot Training College of Ireland (PTCI) Ltd. The college directors petitioned the court for protection after an independent accountant’s report said it had a reasonable prospect of survival if certain steps were taken, including obtaining a new investor.
The college said the cause of its difficulties included the breakdown of its relationship with its US partner, the Florida Institute of Technology Aviation.
In July, about 80 trainees were left stranded in Florida after being told their training would not be continuing, each having paid about €80,000 for the course.
When the matter returned before the High Court yesterday, Ms Justice Maureen Clark granted Mr McAteer a 30-day extension to the period of protection to allow him to put together a survival plan.
The court heard that a new investor was prepared to come on board. Neither its identity nor the amount it is prepared to put into PTCI were revealed in court. However, it is understood the investor has no previous involvement with the Irish pilot training college.
Ms Justice Clark said she wanted it recorded that in granting the extension she did not endorse a proposal that PTCI’s 350 students, who have already paid fees, give up any rights under their contracts with the school.
Counsel for the examiner, Bernard Dunleavy, accepted that the proposed investment was dependent on the students’ contracts being waived. This could happen only if the students agreed to give up any claim they had against PTCI and waived their contracts, or if the examiner applied to the court to make orders to repudiate all 350 students’ contracts. If neither of these things happened, it was likely the examinership process would fail and PTCI go into liquidation.
Counsel said Mr McAteer would continue to talk with a steering group that represented the majority of the students and hope for some arrangement.
Counsel disagreed with the judge when she said the students “may get nothing” no matter what happened to the company. The students would receive some dividend if the examinership process was successful, counsel said.
For any examinership process to be successful, creditors must do better from a scheme of arrangement than the company being wound up, counsel said. As a result of the judge’s order, the examiner has until October 25th to finalise a scheme to allow PTCI to continue as a going concern.