[UK] Millions in unpaid salaries and benefits as Cargologicair is wound down

More than 100 staff at UK airline Cargologicair (CLA) are still owed salaries and benefits totalling nearly £3m ($3.8m) as the company’s wind down continues, The Loadstar reports.

Cargologicair is sister to Volga-Dnepr Group, it faced sanctions as a result of its ownership by Russian Alexei Isaikin and is currently under administration, now extended for two more years.

It reportedly owes 108 employees and around 89 other claimants approximately £5.2m.

In its six-month progress report, the administrator noted that Cargologicair’s bank statements showed payments to staff, however, the employees claimed the money had failed to arrive in their personal bank accounts. Administrator Buchler Phillips said it was investigating where the money had gone. 

Only two members of staff now remain on the airline’s books.

Buchler Phillips stated, “The employees have total unsecured creditor claims with a value of £2,978,268 … employees have submitted claims in various forms and we are in the process of adjudicating them. We will write to any employee who has not submitted a claim in Q1 of 2024.”

It did not share details of when staff can expect to be paid.

According to The Loadstar, the report offers a revealing insight into how companies are wound down. HR and payroll records were reportedly discovered in a storage centre, which could only be accessed once the storage company was paid. Alongside staff records an assortment of “branded goods” from both CLA and Volga-Dnepr UK was found, including aircraft models. These will be destroyed to save storage costs.

Untangling CLA’s affairs has been made more complicated by banks and software companies freezing accounts and services. Microsoft restored services to some accounts in October but not to all.

“The lack of access to Microsoft records is severely hampering the progress of the administration,” Buchler Phillips said in its statement and added that, as a result, it would take legal action against Microsoft. 

Software company Trax reportedly restored access to the aircraft stock records in November, once it had been paid, enabling the administrator to try to sell aircraft parts.

CLA has around £7.5m across two bank accounts but the administrator only received access in the third quarter, towards the end of the administration period, hence the need for an extension. Sole shareholder Caro Logic Holdings has been struck off the UK companies’ register for failing to file accounts, complicating matters further.

The airline could reportedly receive a tax refund of some £3.3m and is owed £205,000 in VAT. But until all returns are submitted, claims can’t be processed.

Ordinary and secondary preferential creditors - owed around £1.16m - could receive dividends in Q1 next year. £3.2m is reportedly owed to “connected companies” that have faced the same sanctions, like Volga-Dnepr UK.

In November, Volga-Dnepr UK received a compulsory strike-off notice. However, the action was discontinued at the start of this month - probably connected to CLA - because, according to the statement, “cause has been shown why the above company should not be struck off the register…the registrar is taking no further action”.

Source: The Loadstar

(Quotes via original reporting)

More than 100 staff at UK airline Cargologicair (CLA) are still owed salaries and benefits totalling nearly £3m ($3.8m) as the company’s wind down continues, The Loadstar reports.

Cargologicair is sister to Volga-Dnepr Group, it faced sanctions as a result of its ownership by Russian Alexei Isaikin and is currently under administration, now extended for two more years.

It reportedly owes 108 employees and around 89 other claimants approximately £5.2m.

In its six-month progress report, the administrator noted that Cargologicair’s bank statements showed payments to staff, however, the employees claimed the money had failed to arrive in their personal bank accounts. Administrator Buchler Phillips said it was investigating where the money had gone. 

Only two members of staff now remain on the airline’s books.

Buchler Phillips stated, “The employees have total unsecured creditor claims with a value of £2,978,268 … employees have submitted claims in various forms and we are in the process of adjudicating them. We will write to any employee who has not submitted a claim in Q1 of 2024.”

It did not share details of when staff can expect to be paid.

According to The Loadstar, the report offers a revealing insight into how companies are wound down. HR and payroll records were reportedly discovered in a storage centre, which could only be accessed once the storage company was paid. Alongside staff records an assortment of “branded goods” from both CLA and Volga-Dnepr UK was found, including aircraft models. These will be destroyed to save storage costs.

Untangling CLA’s affairs has been made more complicated by banks and software companies freezing accounts and services. Microsoft restored services to some accounts in October but not to all.

“The lack of access to Microsoft records is severely hampering the progress of the administration,” Buchler Phillips said in its statement and added that, as a result, it would take legal action against Microsoft. 

Software company Trax reportedly restored access to the aircraft stock records in November, once it had been paid, enabling the administrator to try to sell aircraft parts.

CLA has around £7.5m across two bank accounts but the administrator only received access in the third quarter, towards the end of the administration period, hence the need for an extension. Sole shareholder Caro Logic Holdings has been struck off the UK companies’ register for failing to file accounts, complicating matters further.

The airline could reportedly receive a tax refund of some £3.3m and is owed £205,000 in VAT. But until all returns are submitted, claims can’t be processed.

Ordinary and secondary preferential creditors - owed around £1.16m - could receive dividends in Q1 next year. £3.2m is reportedly owed to “connected companies” that have faced the same sanctions, like Volga-Dnepr UK.

In November, Volga-Dnepr UK received a compulsory strike-off notice. However, the action was discontinued at the start of this month - probably connected to CLA - because, according to the statement, “cause has been shown why the above company should not be struck off the register…the registrar is taking no further action”.

Source: The Loadstar

(Quotes via original reporting)