Monarch Appeal Court ruling paves way for multi-million pound pension payout

 
Oliver Gill
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Monarch Airlines fell into administration in the early hours of 2 October (Source: Getty)

Monarch pensioners have been given fresh hope of salvaging a multi-million pound payout from the collapse of the airline.

Administrators KPMG today won a Court of Appeal ruling regarding valuable take-off and landing slots at Gatwick and Luton.

The slots are Monarch’s main asset, with a reported valuation of £60m.

And City A.M. understands today's the decision paves the way for Monarch’s retirement fund, which is languishing in lifeboat the Pension Protection Fund (PPF), to lay claim to some of the recovered cash.

Insiders said the PPF has crunched the numbers following Monarch’s failure on 2 October and believes a £7.5m claim it has against the airline ranks higher than much of the cash poured in by former owner Greybull.

Alongside a £30m cash payment, the PPF was awarded the £7.5m loan notes by Monarch as part of a deal to ditch the pension fund into the lifeboat in 2014.

Earlier this month, KPMG lost a High Court ruling, which upheld a decision Airport Coordination Limited, stripping the administrators of the slots.

But today, the Court of Appeal ruled Monarch was still a carrier when the slots were due to be allocated last month.

Read more: Monarch administrators to appeal lost court ruling over £60m airport slots

"Delighted"

KPMG administrator Blair Nimmo said he was “delighted with the ruling” and the significance to the sector “could not be underestimated”.

He added: “We will now progress the slot exchange transactions we have underway, whose buyers will be announced at completion. We must stress there will be no immediate distributions to any creditors.”

A spokesperson for the PPF said: "It is in the interests of PPF members and levy payers to secure the largest recovery possible from the administration of Monarch. KPMG being able to sell these landing slots on behalf of creditors improves the prospects of a recovery for the PPF. We, therefore, welcome the outcome of the appeal."

A spokesperson for Greybull said: "In practice, the issues relating to slots are a matter for KPMG acting as administrators. This decision will possibly lead to a better outcome for parties that provided financial support to keep Monarch flying when others shied away and for other important creditors such as the Pension Protection Fund.

"This decision is also good news for the taxpayer, airports and airlines. For now, Greybull can do little more than await the final outcome of the administration, which as today demonstrates is a complex and multifaceted process."

Read more: How Swiss billionaire tried to dump Monarch pension fund for less than £10m

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