Certain Bombardier noteholders have filed a complaint before the New York Supreme Court reiterating claims that the Canadian manufacturer violated lending covenants by divesting its transportation business, regional jet program, and aerostructures division, Bombardier reported Tuesday. The complaint came from some holders of 7.450 percent senior notes due in 2034 and alleged that Bombardier's actions surrounding the divestitures and subsequent consent agreements breached their rights.

Similar allegations were made by those noteholders last year regarding the divestitures. Their complaint, however, was rebuffed in May when Bombardier successfully concluded a consent solicitation of its senior noteholders. Under the solicitation, Bombardier sought consent from its noteholders for a clarification in the notes that the transactions were permitted and did not represent a default of loan agreements. Bombardier agreed to consent payments of $1.25 per $1,000 due on the affected note series for noteholders that participated.

These noteholders, however, have now turned to the courts, informing Bombardier of the complaint in a January 31 letter. Bombardier intended to file a motion to dismiss, a spokesman said. 

The company issued a statement that it “believes that these allegations are without merit and intends to vigorously defend itself against the action. The corporation believes it is not and has never been in breach of any covenant under the relevant indenture and that the actions taken by it in May 2021, with the support and consent of the requisite holders of the relevant debt securities of the corporation, were fully compliant with the terms of the indentures under which such notes were issued.”

Bombardier added that the divestitures “enabled it to reposition the business, strengthen its balance sheet, accelerate de-leveraging, and better position Bombardier for long-term growth and value creation.”