The Administrative Court of Cundinamarca admitted a claim and took a precautionary measure against the Presidency of the Republic, the Ministry of Finance and Avianca Holdings S.A.
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In the lawsuit, citizen Jonatan Ruíz Tobón assured that the Government and Avianca incurred in a violation of administrative morality, public assets and social security, by approving a credit to the airline for 370 million dollars.
That credit, in any case, has not yet been disbursed since it must be approved by the Court of New York where Avianca took advantage of Chapter 11 of the Bankruptcy Code.
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The plaintiff asked the Court to order the Government to refrain from allocating the resources of the Emergency Mitigation Fund (FOME) for Avianca’s credit, but also requested that precautionary measures be taken to avoid violating the rights he pointed out.
Thus, although the Court has not yet accepted the substance of the claim, it did accept the precautionary measure he requested.
Consequently, the Court ordered the Ministry of Finance to carry out the “administrative steps necessary for the Emergency Mitigation Fund to refrain from disbursing the approved credit to Avianca”.
Among the Court’s arguments, it reads that the judges found that the demand is reasonable and that there is little public information on how this credit was processed and ordered. It also said that with the documents, information, arguments and justifications presented by the plaintiff, it can be concluded that “it would be more burdensome for the public interest to deny the precautionary measure than to grant it.
According to the Court, the plaintiff reported on the financial situation facing Avianca, which show that as of June 30, 2020 the group had losses of $353 million and a deficit of $355 million. The plaintiff also said that this bad economic situation is “preexisting to the situation of the pandemic generated by the covid-19, because last year it did not report dividends among its shareholders due to the difficulties due to the financial situation it has been facing since then”.
Because of this situation, the plaintiff asked that public assets be protected by lending money to a company that, despite its importance to the Colombian economy, is in a financial situation like the one he described.
With all this, the Court considered that there is no clarity about the conditions under which the credit was granted or the guarantees that support this loan. In addition, he said, if the precautionary measures are not granted, this could generate “irremediable damage to the public patrimony”.
And for the substantive analysis, the Court asked the Ministry to report what was the objective analysis it made to approve the loan.
Although the plaintiff requested that President Iván Duque be ordered to report any possible conflict of interest due to the fact that his sister María Paula Duque Samper is senior vice president of Strategic Relations and Customer Experience of Avianca, the Court denied that request. According to the corporation, this request has no relation to the urgent precautionary measure to prevent the credit from being disbursed.
By Portafolio
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