Legal challenge

Banks takes action against flight school sellers

Tony Banks
Tony Banks acquired the flight school in December 2001 (pic: Balhousie Care Group)

ARB Aviation, the company formed by entrepreneur and Falklands veteran Tony Banks, has issued legal action the former owners of Tayside Aviation.

Administrators were appointed to Tayside Aviation in April when the current owner stated there were “ongoing working capital requirements that are unable to be funded”. It led to 22 staff losing their jobs.

Mr Banks, who also founded Perth’s Balhousie Care Group, pumped £3 million into the business and cites concerns about the safe and legal maintenance of aircraft and financial compliance at Tayside Aviation.

The Civil Aviation Authority is investigating a number of engineers for allegedly falsifying maintenance records over a period prior to the sale to ARB Aviation in December 2021.

The CAA has the power to both prosecute companies and charge individuals for breaches of the legislation it enforces. 

ARB Aviation has made formal legal claims under the warranties of the sale and purchase agreement between ARB Aviation and the previous owners, James and Kathleen Watt. 

ARB will argue that the business was significantly misrepresented and overvalued at the time it was sold. It will also highlight the impact this ultimately had on stakeholders in the business including the 22 staff, self-employed instructors and Dundee Airport.

James Watt was the accountable manager for Tayside Aviation for part of the period being investigated by the CAA. The accountable manager is directly responsible for the safety of the organisation and for running a management system that ensures activities can be financed and carried out in accordance with applicable regulations. 

Mr and Mrs Watt went to the company’s property the morning following the appointment of the joint administrators (21 April, 2023) to retrieve an aircraft they said they owned and they flew it immediately from Dundee airport. 

A spokesman for ARB Aviation said: “Taking court action is the last thing we want to do but aircraft safety and maintenance is a serious issue and so is the accounting of money. 

“The purchase of Tayside Aviation has been an incredibly frustrating process. All the plans to invest in the business and to grow it have been thwarted at every turn as we have uncovered issues with the maintenance of the planes and the way the money given by students was accounted for. 

“We’re investigating all avenues to recover funds and would advise that others suffering a financial loss should also seek legal advice on the best recourse against the previous owners.” 

Administrators, Geoff Jacobs and Blair Nimmo at Interpath Advisory, placed the company’s total debts at about £2.5 million.

A meeting of the creditors is due to take place on Wednesday 14 June.

Leave a Reply

Your email address will not be published. Required fields are marked as *

This site uses Akismet to reduce spam. Learn how your comment data is processed.