Airline obtains default judgment against leasing company and its CEO

PT (Persero) Merpati Nusantara Airlines v. Thirdstone Aircraft Leasing Group, Inc. and Alan Messner (D.D.C. July 9, 2007).  Merpati entered into an agreement to lease two Boeing 737 aircraft from Thirdstone.  In conjunction with that agreement, the airline wired a security deposit of $1 million to the attorney for Thirdstone, who then transferred the funds to Alan Messner, the company’s CEO.

The airline filed a lawsuit after the defendants failed to deliver the aircraft or return the deposit, alleging breach of contract and conversion causes of action.  When the defendants failed to respond to the complaint, the airline moved the court for, and was granted, a default judgment for $1 million plus postjudgment interest.

Update:  On September 24, 2007, Merpati filed a new lawsuit in the same court based on the same basic facts, but against Hume & Associates, P.C., Robert Hume and Jon C. Cooper.  According to the complaint, the defendants acted as legal counsel “for Thirdstone and/or Merpati” during the lease negotiations and wrongfully transferred Merpati’s security deposit to themselves and to Messner.

Aircraft leasing company stymied by Foreign Sovereign Immunities Act

BCI Aircraft Leasing, Inc. v. Republic of Ghana and Ghana Airways Ltd. (N.D. Ill. Oct. 13, 2006).  BCI, an Illinois company, leased two DC-10 aircraft to Ghana Airways, which is wholly owned by the government of Ghana.  Ghana Airways defaulted on its lease payment obligations, but the government of Ghana repeatedly promised that it would pay the airline’s debts, which exceeded $5 million.

After payment was not made, BCI sued the Republic of Ghana and Ghana Airways in an Illinois federal court.  The defendants moved to dismiss the case under the Foreign Sovereign Immunities Act.  Under that Act, a U.S. court can only obtain jurisdiction over a foreign state if it engaged in commercial activities that bear a significant relation to the U.S. 

The court held that the Republic of Ghana engaged in commercial activities by guaranteeing the airline’s debts but that such activities neither occurred, nor had a direct effect, in the U.S.  Thus, the court dismissed the case on the grounds that the defendants had immunity under the FSIA.

Ouch!