3 January 2023Insurance

Merx Aviation files suit against Lloyd's and band of specialty insurers

Aircraft leaser Merx Aviation Servicing has filed suit against  Lloyd's and a group of ten insurers in what is likely the latest in a growing string of suits to cover losses after Russian appropriated leased aircraft following the imposition of sanctions.

Some seven aircraft owned by financing SPVs were lost when Russian lessees refused to return aircraft after sanctions were imposed on Russia.

Merx Aviation Servicing Limited is joined by units Rise Aviation 1, Eos Aviation 2 and Eos Aviation 7 in bringing suit against the insurers.

Chubb, HDI Global Specialty, Fidelis, Great Lakes, Swiss Re, Global Aerospace Underwriting Managers, Axis Specialty, AIG, Starr International and Axis Capital find themselves on the list of defendants.

Merx is wholly-owned by Apollo Investment Corporation, a NASDAQ-listed business development company managed by Apollo Investment Management, L.P., an affiliate of Apollo Global Management, Inc.

The group's financing SPVs list seven aircraft lost, the latest annual reports on record indicate. Rise Aviation 1 lost four of its five aircraft and wrote a $46 million impairment on unlisted aircraft valuations. EOS Aviation 7 listed one aircraft with a carrying value of $27.2 million. EOS Aviation 2 claimed two aircraft leased to Russia-based airlines at end-2021 with carrying value of $102.5 million.

Court dockets are increasingly filled with aircraft leasing claims. Leasers Avolon, SMBC Aviation Capital, BOC Aviation, CDB Aviation, Dubai Aerospace Enterprise (DAE) and a DAE-sponsored SPV have all filed in recent weeks. AerCap has led the charge with a massive $3.5 billion suit filed in June.

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