Ogier acts for Otium Group in loan agreement dispute

Ogier acts for Otium Group in loan agreement dispute

Ogier in Guernsey acted for the Otium Group in a loan agreement dispute, to the sum total of €3 million plus interest.

The trial raised numerous factual and legal disputes concerning the contractual intentions of the parties, the commercial purpose of the loan agreement, its terms and whether any relevant agreements had been entered into which could affect the alleged liability of the Otium Group.

In 2011, Otium Event GMBH & co. offshore Ausrüstungen KG (Otium KG), a German company, entered a loan agreement with Guernsey company, Kingfisher Aviation Limited (Kingfisher) to the sum of €3 million to purchase a helicopter, with the intention of refurbishing and selling it back to Kingfisher. But once refurbished, Otium KG was unable to sell it to Kingfisher or subsequently to other third parties. Otium KG also attempted to generate revenue by chartering the helicopter, however, the market conditions did not make this viable.

In 2019, Kingfisher called in the loan, with accrued interest, from Otium KG and the other companies in the Otium Group (together, the Otium Group). The Otium Group did not pay, disputing the terms of the loan agreement were as Kingfisher alleged. Kingfisher therefore decided to sue the Otium Group in the Royal Court of Guernsey by way of a claim dated June 2019. The Otium Group defended the claim and the matter went to trial in November 2021. It lasted five days and included the cross-examination of the directors of Kingfisher and the director of the Otium Group. Judgment was handed down on 28 June 2022.

The Ogier team was led by Partner Bryan De Verneuil-Smith with assistance from senior associate Michael Rogers.