Court demands E-Clear reveal Globespan cash

Posted by Tanya Hutchens

The credit card processing company used by Globespan, the collapsed airline, has been ordered to disclose its financial position in a £35 million legal dispute over flight payments.

A High Court judge gave E-Clear, which also provided payment services to the failed XL Airlines, until midday on Friday to provide evidence of how much money it is holding relating to Globespan.

Globespan, a Scottish carrier, collapsed in December leaving about 4,000 holidaymakers stranded across Europe and Africa. PricewaterhouseCoopers (PwC) was appointed administrator.

E-Clear, run by Elias Elia, the chief executive, acts as a middleman between credit card companies and airlines.

The dispute arose because PwC has accused E-Clear of withholding money that E-Clear took from Globespan customers without passing it on to the airline.

E-Clear has argued that it is entitled to keep the money because it is obliged to pay refunds on Globespan flights that were paid for but never taken. It is common for payment-processing middlemen to withhold more money than usual if a client is in financial difficulty.

PwC says E-Clear has consistently refused to provide details of how much it holds or transfer the disputed sums into an escrow account until the matter is resolved.

At today’s hearing, lawyers for PwC asked the High Court to place E-Clear into administration as a means of forcing it to disclose its accounts.

Mr Justice Floyd accepted E-Clear’s request to adjourn the case until next week, but imposed the Friday deadline, saying that the payments company “appears to be putting off the evil day”.

Ian Oakley-Smith, joint administrator of Globespan at PwC, said: “We are satisfied that the judge recognised our concerns and has put in place a process that will clarify the E-Clear position in a very short time.”

E-Clear did not return calls seeking comment.

Mr Elia told Scotland on Sunday that Globespan was a “victim of the recession”, adding that E-Clear had also “suffered” from the loss of an “important client”.

The Serious Fraud Office (SFO) has received a complaint relating to the matter, but has not launched an investigation.