CoC recommends EY honcho as new liquidator in Go First case | Company Business News-OxBig News Network

New Delhi: The Committee of Creditors (CoC) of the bankrupt airline Go First has voted to appoint Dinkar Venkatasubramanian as the liquidator for the airline’s liquidation proceedings. 

The resolution professional counsel submitted the CoC’s recommendation to the National Company Law Tribunal (NCLT) for approval on Thursday.

However, the NCLT did not pass the approval order on Thursday and deferred the decision, scheduling the next hearing for 6 December. It is expected that the tribunal will pass the liquidation order and may approve the CoC’s proposed liquidator at that time.

Venkatasubramanian is a Chartered Accountant and is registered as an Insolvency Professional with the Insolvency & Bankruptcy Board of India. He is a partner at Ernst & Young Restructuring, specializing in crisis stabilization, liquidity management, and the restructuring and turnaround of distressed companies. He is an expert in sectors such as retail, industrial products, infrastructure, healthcare, and automotive components.

Venkatasubramanian’s appointment was finalized after the NCLT rejected Go First’s plea to appoint the current resolution professional, Shailendra Ajmera, as the liquidator. The tribunal clarified that Ajmera could not continue in the role, though he could still be involved in the liquidation process in another capacity.

Go First filed for liquidation in September, citing the lack of viable assets or a revival plan. In its liquidation petition, the airline had requested that Ajmera be appointed as the liquidator.

Third-party foreign funding

In the case , the resolution professional (RP) had also requested the NCLT’s approval for third-party funding from a US-based entity to support Go First’s arbitration case against engine maker Pratt & Whitney at the Singapore International Arbitration Centre (SIAC). 

The airline is seeking $1 billion in claims against Pratt & Whitney over faulty engines that led to the grounding of its fleet and its voluntary insolvency in May 2023.

Earlier, RP informed the NCLT that creditors had already spent around ₹160 crore on litigation since the insolvency filing and were unwilling to provide additional funds for the Singapore arbitration. The RP argued that third-party funding should be treated as a loan, repayable from the liquidation proceeds. However, the NCLT emphasized that under the Insolvency and Bankruptcy Code (IBC), liquidation proceeds must first be distributed to operational creditors, not foreign third-party funders.

In response, the tribunal also pointed out that the government has not yet approved foreign third-party funding for insolvency cases under the IBC. It warned that allowing such funding could set a precedent, leading to more similar requests from corporate debtors.

The RP highlighted that the arbitration claim was Go First’s last significant asset, as all 54 of its leased aircraft had been deregistered and reclaimed by lessors following a Delhi High Court order in April 2024. Go First has engaged US-based litigation finance firm Burford Capital, which is prepared to provide $20 million in the first tranche to finance the arbitration. 

While litigation finance is a well-established practice in countries like Australia, the UK, and the US, it is still relatively new in India, with few reported cases. In these countries, litigation financiers cover legal costs in exchange for a portion of any successful settlement or award.

Go First’s lenders are relying on this arbitration as their final opportunity to recover dues. They are also separately pursuing recovery through land collateral pledged to them, along with other remaining assets such as aircraft parts and machinery, which could provide additional recovery avenues.

The airline owes approximately ₹6,200 crore to creditors, with major claims from the Central Bank of India ( ₹1,934 crore), Bank of Baroda ( ₹1,744 crore), and IDBI Bank ( ₹75 crore). Go First has been grounded since 3 May 2023, after its former promoter, the Wadia Group, filed for voluntary bankruptcy, citing delays in securing aircraft engines from Pratt & Whitney.