From now on, whenever somebody calls me for money (you know how infrequent that is) I will have a new response for them.
It’s my own “red” line, and it will go something like this:
“Yes, Ms ____,” (why is it always a young woman with a gentle but insistent voice?) “I do plan to pay that entire million dollars I owe your company. I am planning to sue the government for ___ (here I will cite a list of grievances previously worked out with my lawyer), and we expect to get a few million in damages. So, if you could just hold on,” (here I will not say, “for an indeterminate time, maybe forever,”) “we will settle with you in full.”
I have been inspired to pursue this course of action in an effort to defend my thinning cash flow, remembering the simple three-word maxim every business lives by, to wit, “cash is king”. Having no cash is akin to the body suffering a heart attack. No circulation, no life.
The inspiration came from an article on Page 4A of the NATION of last Wednesday titled Court Undecided On REDjet Case, which was, to my mind, appropriately placed next to an article titled Cardiac Suite Officially Opens.
It had nothing to do (officially) with REDjet, but if the maxim mentioned above is correct, you might say poor old REDjet suffered a massive coronary last year when it just ran out of money.
According to the story, the court heard that REDjet’s assets are about $2.4 million and its liabilities 20 times that, some $47 million.
The airline, which started in May 2011, expired in June 2012. How could it have amassed so much debt in just 13 months? I ask you because I have no idea myself.
Of that total indebtedness, $1.5 million is owed to Grantley Adams International Airport (GAIA Inc.) in landing and parking fees.
And you thought the Gaya car park was expensive.
Soon after its demise, REDjet told its creditors that it would pay them back 25 cents on the dollar. Having passed primary school arithmetic, my calculations tell me that the company would need about $12 million to do that.
With $2.4 million assets, it would need to raise close to $10 million if it is to pay its creditors, a mere quarter of the amount it owes.
Even worse run
To do that, REDjet hopes to get up to $3 million from its parent company Airone Holdings Ltd and most of the remainder by means of “a settlement or award from any legal action the directors and shareholders-creditors take against the Government of Barbados”.
My mind goes back to the days of yore (two years ago) when the red carpet was unfurled for this start-up wanna-be EasyJet of the Caribbean, with its ridiculously low $9.99 fares (plus taxes, of course) and its in-LIAT’s-face price comparison ads.
Turns out, in my view, that REDjet was even worse run than LIAT, which, as you might imagine, would be pretty hard to do. But somehow they succeeded in financially crashing and burning in just 13 months.
In those last days, REDjet sent out several “Maydays” to the Government of Barbados, and I read in the press of some back and forth about government helping out. What really happened during those last days, it seems, might be the core of any lawsuit brought against the Government by REDjet.
GAIA Inc. does not think much of this potential case’s potential to bring in the money needed so that it can get paid. A quote carried in the newspaper from GAIA’s “39-page report” put it this way: “The proposal has failed to establish factors and a chain of events to support a finding that the debtor company is likely to be rehabilitated . . . GAIA contends that the insolvency should not be allowed to drift along awaiting funds based on the hopes and expectations of the debtor and shareholders from future litigation against the Government of Barbados.”
The airport company wants REDjet liquidated now. The case has been adjourned in an effort to give REDjet a chance to reply.
I have to agree with GAIA. I mean, it’s not like they actually got a judgement in their favour and could depend on getting the money plus interest, is it?
Look at how well Barack is doing since he got his judgement.
The lawsuit is apparently not even filed as yet, or at least that is how I interpret the term “future litigation”. You can’t take that to the bank, so why should you be able to take it to court?
Meantime, it seems that my “red” line response has also crashed and burned even before I even took it out for its first solo flight.
Thanks, GAIA.
