Air Europe creditors to get 5.35p in pound

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THE 7,000 unsecured creditors of Harry Goodman's Air Europe, which collapsed in 1991 with liabilities of more than pounds 500m, are to receive 5.35p in the pound, writes Michael Harrison.

The payout, announced yesterday by Phil Wallace of KPMG Peat Marwick, the joint supervisor of the airline, amounts to pounds 21.3m, compared with the pounds 398m owed to creditors. It is likely to be the only payment the creditors receive.

The costs of winding up the business, including Peat Marwick's fees, are estimated at pounds 5m-pounds 6m.

Mr Wallace added that he was still considering whether to mount an action against British Airways over allegations that it contributed to Air Europe's demise. 'The position on BA is that we are investigating,' he said.

'If, and this is very hypothetical, there was a case against BA, it is conceivable that more money would come to creditors.' However, the likelihood of such an action is thought to be less than 50-50.

Mr Wallace paid tribute to the 11 biggest creditors of Air Europe who had agreed to restrict their claims so that a payment could be made to all 7,000 creditors in one instalment.

The payout might have been higher but for the deep recession in the worldwide travel trade, which contributed to Air Europe's collapse and severely limited the scope for releasing or selling on its aircraft.