Defunct Sky Bahamas Faces Court Demand: Must Provide $50,000 Security Bond by December 8

In a recent legal development, the Bahamas Appeal Court has issued an order directing the defunct Sky Bahamas (Nassau International) to furnish a security bond of USD50,000 by December 8, 2023. This requirement is a prerequisite for appealing a Supreme Court judgment that mandated Sky Bahamas to pay nearly USD220,000 plus interest to maintenance company AOG Investments.

Deputy registrar Anishka Pennerman, in a ruling on October 6, outlined that Sky Bahamas’ appeal would be stayed until the security bond is submitted. Failure to comply with this order would result in the dismissal of the appeal, accompanied by associated costs.

Initially, AOG Investments sought a security bond of USD1,116,784.64, later reduced to USD500,000. Sky Bahamas ceased operations upon the termination of its air operator’s certificate (AOC) on August 19, 2019. The Appeal Court’s findings indicated overwhelming evidence of Sky Bahamas’ insolvency, with the airline acknowledging its financial challenges. The affidavit submitted by Sky Bahamas CEO Randy Butler cited several reasons for their inability to raise the required security bond.

These reasons include strained banking relationships arising from fraud allegations in court cases, personal indebtedness of CEO Randy Butler, and the airline’s primary legal opponent, former financier Fred Kaiser. The financial burden on the airline encompasses outstanding taxes, damages owed to AOG Maintenance Company Ltd, legal costs related to the Supreme Court case, and damages to Nassau Airport Development Company Limited.

Furthermore, Butler’s outstanding credit card debt to the Royal Bank of Canada, improperly attributed to the airline’s corporate debt, adds another layer to Sky Bahamas’ financial woes. The defunct airline is also entangled in an unresolved labor dispute before the Bahamas Industrial Tribunal, stemming from the dismissal of 43 employees following the suspension of operations.

This legal saga highlights the complex challenges faced by Sky Bahamas in the aftermath of its cessation of operations and underscores the intricacies involved in settling financial obligations within the aviation industry. The industry will be closely watching the developments as Sky Bahamas navigates through these legal hurdles.