Two lenders have turned to a U.S. court to demand compensation from Bombardier Inc. after the business jet maker sold off key assets over the past few years.
In a filing to the New York Supreme Court, plaintiffs Antara Capital Master Fund and Corbin Opportunity Fund are demanding relief and damages over alleged breach of contract.
They claim that Bombardier's divestures -- including the sale of both its rail business to Alstom for US$3.6-billion last year and its remaining stake in the Airbus jetliner program, formerly known as the C Series, in 2020 -- violated covenants on a US$250-million debenture maturing in 2034.
The submission reiterates claims from a legal battle that Bombardier settled with several lenders last May by modifying the terms and conditions of eight tranches of debt set to expire between 2022 and 2034.
Bombardier says in a statement it believes the latest allegations are "without merit" and that it has never breached the relevant covenants.
The company churns out about 10 business jets per month as a pure-play manufacturer of private planes following the selloff of two of its biggest operations under a cloud of debt.
- This report by The Canadian Press was first published Feb. 2, 2022.
