Court forces E-Clear to reveal Globespan cash
Tuesday 12 January 2010
A High Court judge has this morning ruled that E-Clear, the credit card processing firm linked to the collapse of the airline Globespan, has to reveal how much money it holding on behalf of the failed airline by the end of the week.
E-Clear has until noon on Friday to submit evidence of the "amount of funds" it holds.
Administrators to Globespan, PricewaterhouseCoopers, argued in court that E-Clear owes around £22 million to the airline in cash for flights and bookings that have already been completed. An additional £13 million could be held for customers who paid for but did not actually fly with the airline due to its collapse in early December.
Adjourning proceedings until Tuesday 19th of January Judge Floyd said that E-Clear's application to adjourn the winding up order appeared “to be putting off the evil day."
Mr Elias Elia, founder of E-Clear, was not present in court, although he has agreed ‘not to dispose of any assets of the company’ pending the hearing of the administration application next Tuesday.
Ian Oakley-Smith, partner at PWC said: “We are satisfied that the judge recognised our concerns and has put in place a process that will clarify E Clear's position in a very short time.”
The judge added that the case was of "significant public interest".
Today’s decision is a blow for E-Clear which has consistently refused to divulge how much money it is holding on behalf of airlines including Globespan.
The application made by Globespan’s administrators was supported by three other creditors who argue that E-Clear is holding on to their cash without legitimate justification.
Swimming Nature Licensing Limited, which provides swimming lessons in London and Scotland, claims it is owed more than £230,000 by E-Clear, despite receiving assurances that any outstanding cash would be settled more than six months ago.
YouTravel.com, an accommodation-only holiday company, claims it is owed more than £200,000. The company claims that E-Clear began delaying its payments in February last year and ceased making payments altogether in December last year.
Go Travel, a Canadian-based company that stopped using E-Clear’s services in April last year, claims it is owed more than £250,000.
KPMG had originally been lined up and agreed as administrator to E-Clear, should the winding up application prove successful, but it’s thought that the accountant may be conflicted.
A spokesman for E-Clear was unavailable for comment.
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