Azul wants to scrutinise TAP SGPS to find out who is to blame for the insolvency

David Neeleman’s Azul wants to scrutinise the former TAP SGPS. The Brazilian company has doubts about how the holding company, now called Siavilo, went into insolvency and wants to analyse accounts, documents and contracts relating to the process, including management decisions and documents relating to the depletion of assets.

In the insolvency of TAP SGPS, which has no activity and negative equity of more than €1 billion, Azul is claiming a credit of €181.95 million relating to a bond issue by the holding company subscribed by the Brazilian airline in 2016. It has now asked the court for more time to analyse all the information in order to submit what is known as an insolvency qualification application.

The judge of the Lisbon Commercial Court granted the request, considering that the reasons given by Azul are “acceptable” for the following three reasons:

• Because the insolvency administrators have not yet provided “access to all the documents that the applicant creditor believes are necessary to take a reasoned and substantiated position”;
• Because, so far, the final list of recognised and unrecognised creditors has not yet been submitted, “so it’s possible that the insolvency administrators may still be in the process of obtaining some documents that make up the insolvent’s records, to be made available in due course”;
• And also because “the consideration inherent in a possible request for qualification of insolvency appears complex and involves the laborious and demanding analysis of documentation that is believed to be extensive” and which was requested by Azul.

David Neeleman’s company, which has not commented on the matter, wants to know everything that has happened at TAP SGPS in recent months and that has led to its current situation. It intends to analyse the holding company’s accounts (for the last three years), but not only that.

“In general”, Azul wants to access and analyse documentation relating to “the overall trajectory of all the circumstances that led to the gradual financial deterioration, the continuous decline in the insolvent company’s activity and the constant loss of assets that has occurred over time”.

This includes decisions made by TAP SGPS’s governing bodies (general meeting, board of directors, executive committee and supervisory board) as well as “all contracts entered into by the insolvent party up to the time of the respective declaration of insolvency and consideration of their effects on the financial consistency of the insolvent party”.

In this context, the judge accepted Azul’s request, which now has until the beginning of next month to “request, if it so wishes, the classification of the insolvency as culpable, indicating the persons who should be affected by such classification”.

In January, TAP SGPS sold the last assets it held to TAP SA: the entirety of Portugália, 51% of Cateringpor and 100% of UCS, the group’s healthcare company.

Azul has been in dispute with TAP since the summer of 2024. Facing financial difficulties, Azul attempted to negotiate with TAP the early repayment of the 90 million in convertible bonds it subscribed to in 2016, plus interest. The Portuguese carrier proposed to pay a much lower amount, which was rejected by Azul, which demanded that TAP recognise the guarantees provided in the bond loan, which include the Miles & Go customer loyalty programme.

The airline’s board of directors rejected this and in November filed a lawsuit seeking the annulment of the guarantees, arguing that this was not senior debt but shareholder loans, as David Neeleman was simultaneously a shareholder of TAP SGPS and the largest shareholder of Azul — an understanding that the Brazilian airline has already contested.

In January, TAP SGPS was renamed Siavilo. The holding company’s governing bodies resigned en masse between the end of March and the beginning of June, and TAP filed for insolvency the following month, which was decreed by the Lisbon District Court in early August. This month, the creditors’ meeting approved the liquidation of the company.