Supreme Court Rejects Avianca Bankruptcy Appeal on Lease Payment

The US Supreme Court declined to hear a case brought by Avianca Group International, one of Latin America’s largest airlines, over the timing of lease payment obligations under bankruptcy law.

Avianca asked the high court to overturn the US Court of Appeals for the Second Circuit’s decision earlier this year that forced it to make post-bankruptcy payments to Burnham Sterling & Co. and Babcock & Brown Securities LLC under aircraft financing and lease contracts.

The dispute centered on whether the payment obligation “arises” at the time the lease was signed—which was before the bankruptcy—or when the payments came due post-bankruptcy. ...