THE DEBT OF SIA SMARLYNX AIRLINES EXCEEDS EUR 238 MILLION
The BLACKLIST.AERO Registry Administration has received a full register of creditors of SMARTLYNX AIRLINES (Latvia), which until recently was part of the AVIA SOLUTIONS GROUP holding. In this list, 781 companies are listed as creditors. The amount of debt is truly amazing: more than 238 million euros.
How it happened that not the largest company in a small country could accumulate such a debt, the Latvian authorities should have figured out. And, possibly, law enforcement agencies. Especially after the company filed a petition for protection from creditors with the Riga court on October 28, 2025. However, it will not be easy to do this, due to the fact that a few days before SmartLynx Airlines ... was sold. Moreover, it was sold to a certain "Stichting Break Point Distressed Assets Management" from Amsterdam (Netherlands), which was created just a month earlier - on September 19, 2025. Well, of course, Avia Solution Group has nothing to do with the creation of this company. It's just that someone really wanted to buy an airline with debts of 238 million and created such a great project specifically for this, as Stichting Break Point Distressed Assets Management.
Well, the team BLACKLIST.AERO has collected and analyzed the facts known so far. Below is structured information on why we suspect Avia Solutions Group of fraudulent asset withdrawal through SIA "SmartLynx Airlines"
Scope and Structure of the company's debt
Total amount of the SmartLynx obligations is approximately: EUR 238.4 million.
Total debt of SmartLynx to Avia Solutions Group entities: EUR 174,374 million.
Total debt of SmartLynx to other creditors: EUR 64 million
Thus, almost three-quarters of all the company's debts are accounted for by companies that are part of the Avia Solutions Group
The main companies are SmartLynx creditors that are part of the Avia solutions Group
ASG Finance DAC (Ireland) – amount of the debt EUR 117,156,477.64
SmartLynx Airlines (Malta) – amount of the debt EUR 38,830,777.26
SmartLynx Airlines OU (Estonia) – amount of the debt EUR 12,515,456.77
Smart Aviation Holdings SIA (Latvia) – amount of the debt EUR 2,298,460.11
Now let's turn to the chronology of events
Autumn 2025: The holding company Avia Solutions Group, owner of SmartLynx, announced a reorganization of its European business. On 23 October 2025, it became known that SIA SmartLynx Airlines (Latvia) had been sold to a group of investors: a combination of the SmartLynx management team and the Dutch fund Stichting Break Point Distressed Assets Management. The other SmartLynx entities – the airlines in Estonia and Malta – were not part of the deal and remained controlled by Avia Solutions Group. The transaction meant the removal of the Latvian SmartLynx entity from the Avia Solutions perimeter and its transfer to new owners.
28 October 2025: Just days following the change in ownership, SmartLynx Latvia submitted an application to the Riga District Court seeking to open creditor protection proceedings—an in-court restructuring procedure. The court declared a moratorium on collections and appointed a supervising administrator, Armands Rasa. The company's overdue tax liabilities, amounting to approximately €522,000, were used as the formal ground for the application.
Early November 2025: The change in the ownership of SmartLynx Airlines Latvia has been officially finalized. The new shareholding structure is as follows: 90% – Stichting Break Point Distressed Assets Management, Netherlands; and 5% each for management members, citizens of Lithuania M. Kazakevicius and E. Demeņus. Edvins Demenus, until now part of the leadership team, became CEO of SmartLynx Latvia. The enterprise keeps running as before and is working on a restructuring plan. The court granted a deadline to 28 February 2026 for the submission of the plan.
Why BLACKLIST.AERO team sees indicators of intentional bankruptcy and possible fraud in everything that is happening
The facts examined reveal several suspicious circumstances that are typical of premeditated bankruptcy or asset diversion schemes:
– Sale of the company shortly before insolvency: Avia Solutions Group sold 100% of SmartLynx Latvia just days before the launch of creditor protection proceedings. Such a hurried ownership transfer directly preceding bankruptcy appears to be a deliberate attempt at isolating a troubled asset from the group, aiming to distance its debts from the rest of the business. This new majority shareholder, Stichting Break Point Distressed Assets Management, specializes in distressed assets and has most probably purchased the company for a symbolic price while taking over its debt. The timing (five days before court filing) strongly suggests foreknowledge of impending insolvency and a preemptive transfer to avoid liability.
– The retention of control by previous management: Despite the formal change of ownership, operational control remained in the hands of the same team. Actually, the deal was an MBO, facilitated by an external fund, with 10% of the shares distributed among SmartLynx executives. Thus, CEO Edvins Demeņus remained on board, allowing the same people who managed the company pre-bankruptcy to maintain the same influence over it. This characterizes intentional bankruptcy schemes in the sense that beneficiaries are able to retain their influence over asset allocation even in situations following insolvency.
– Avoidance of external administration: The selected legal protection mechanism grants SmartLynx an opportunity to avoid full external administration. In such a situation, the court appointed only a supervising administrator, Armands Rasa, and did not transfer executive control. Therefore, SmartLynx's management maintains operational authority during restructuring, instead of an independent administrator reviewing transactions. This approach may provide opportunities for asset transfers to be hidden or for treatment of creditors preferentially because of relaxed external controls.
– Separation of "good" assets, avoidance of creditor responsibility: Avia Solutions Group has hinted at a conscious distinction between the solvent and distressed parts of the business. SmartLynx Airlines Malta and SmartLynx Estonia, which most likely own aircraft and generate revenues, were kept within the Avia Solutions Group and are meant to be merged and rebranded under a single brand, Mokulele. The Latvian entity, bearing the burden of EUR238 million in debt, is effectively being quarantined under the new fund. Profitable assets remain part of the group, and the debts are concentrated in the divested entity, leaving external creditors out in the cold. Furthermore, affiliated companies own the majority (EUR53.6 million) of this debt, thereby creating a conflict of interest in the restructuring votes.
– Intragroup financing at the expense of external creditors: The unusually big internal liabilities within the structure of the firm's debt may suggest that SmartLynx Latvia was financed by its affiliated entities rather than by external capital. It could serve to hide the transfer of funds, cover losses internally, and then write off such debts in bankruptcy while reducing the external debt burden. If asset transfers from the Latvian entity to group companies occurred before the sale, they might amount to elements of fraudulent asset stripping.
BLACKLIST.AERO's conclusion
Accumulated evidence points to intentional bankruptcy at SmartLynx Airlines Latvia. Immediately prior to filing for protection from creditors, the sale of the company retained management control and resulted in business division, creating an impression of a premeditated plan of debt isolation and beneficiary protection. The pattern resembles that of an asset-stripping scheme: the profitable divisions stay with the old owner while debt-laden ones are transferred to a distressed fund. The external creditors are put in a disadvantageous position, being forced to agree to restructuring terms proposed by those who were in charge when the crisis emerged. From a regulatory or investigative point of view, it is recommended to scrutinize for deliberate insolvency and unfair treatment of creditors all pre-sale transactions and conduct of responsible officers. If confirmed, such conduct could constitute violations under insolvency or fraud laws, carrying corresponding legal consequences.
BLACKLIST.AERO’s recommendations to creditors of SmartLynx (Latvia)
Paralegal actions
1. Organize a working group of creditor companies to coordinate further actions.
2. Refuse to provide services to ALL companies belonging to Avia Solutions Group until this holding officially assumes financial responsibility for the debts of SmartLynx (Latvia)
Legal actions
1. Submit a consolidated application from the group of companies – creditors of SmartLynx to the law enforcement authorities of Ireland, Lithuania and Lithuania with a request to investigate possible fraudulent actions on the part of Avia Solutions Group.
2. To seek through the court the recognition of the transaction for the sale of SmartLynx (Latvia) to "Stichting Break Point Distressed Assets Management" as null and void.
BLACKLIST.AERO team
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