Patrick Cowley received a call from a legal firm on a late April evening. What he was told is expected to occupy his professional life for the next two years. Oasis, the high-profile long-haul budget airline based in Hong Kong, was about to declare insolvency.
'The lawyers said we will be in court tomorrow morning and we want you to be one of the candidates for appointment as the provisional liquidator,' Mr Cowley, a restructuring principal at KPMG China, said. Two firms were put forward - the other a boutique restructuring house. The court appointed Mr Cowley and colleague Edward Middleton, head of restructuring services for KPMG China, as the provisional liquidator charged with safeguarding a company's assets after presentation of a winding-up petition, but before a winding-up order was made.
'In addition to our track record in handling major insolvency assignments, I think the court also recognised the importance of KPMG's international dimensions given that Oasis had operations in Britain and Canada, and an aircraft on lease in Namibia,' Mr Cowley said.
These international dimensions were going to bring Mr Cowley and Mr Middleton and the various internal and external teams their biggest challenges in handling the Oasis liquidation.
Oasis had four aircraft - a fifth had been ordered but was not delivered due to the insolvency. One was in Hong Kong on the night of April8, a second was en route from Vancouver, a third was on the ground in London and the fourth and its flight crews in Namibia on a 'wet lease' (a leasing arrangement where an airline provides an aircraft, complete crew, maintenance and insurance to another which pays by hours operated). In addition to the aircraft that were out of Hong Kong, there were about 120 flight and cabin crew who also needed to be brought home from the countries to which Oasis flew.
The magnitude of the Oasis collapse and the amount of public interest meant the provisional liquidators needed significant resources in the first few days following the court appointment. KPMG had teams dealing with security and control matters, and IT and management information systems, and parties handling the complex legalities, corporate finance issues and asset valuations.