Monarch Airlines was the biggest ever UK airline to cease trading, after they entered administration this October. The airline appointed KPMG as administrators and a creditor report has today revealed that the business owed over £450m to unsecured creditors.
The new documents revealed that the airline has a liability of £466m to unsecured creditors; this figure includes £5.2m relating to the claims made by customers following flight cancellations and delays. The airline had £164m of secured debt at the time of entering administration. Secured creditors are still expected to experience a shortfall despite efforts from the administrators to raise money from selling the groups assets and it is still not certain whether they will receive any money back. It is almost certain that the unsecured creditors of Monarch Airlines will not receive any money at all following the administration.
This news is an important reminder to ensure that your business is covered against any potential bad debt, especially if you offer goods or services on credit terms. By having appropriate credit management processes or a Credit Insurance policy in place you can rest assured that you are protected should your debtor go bankrupt or enter administration.
For more information about our Credit Insurance policies and to find something suitable for your business, please contact one of our specialist advisors on 01275 817320.