The funds of Kyiv-based AeroSvit Airline on all accounts at Ukrainian banks were arrested on January 22, 2013 under a resolution of the State Law-Enforcement Service of the Chief Justice Department in Kyiv region, which was issued in violation of Ukrainian law, the press service of the carrier said late on Tuesday.

"Payments were blocked in full due to the decision, including the payment of wages to the airline's employees and the return of funds to passengers for unused tickets. A threat to the current operations of AeroSvit has been created, including to payments for the servicing of flights," the press service said.

The law-enforcement department of the regional department of the State Law-Enforcement Service of the Chief Justice Department in Kyiv region on January 16, 2013 decided to arrest the funds of AeroSvit on all accounts in nine Ukrainian banks to execute a ruling of the economic court in Kyiv region on the collection of around UAH 5 million from the airline under a claim of Trans-Aero-Handling LLC.

The airline said that the decision was not in line with Ukrainian law, in particular, the law on law-enforcement. According to paragraph 8 of part 1 of Article 37 of the law, law-enforcement is to be suspended if, in line with the law, a moratorium introduced by the economic court is introduced at the request of the execution creditor if the court does not observe proceedings in a case of the debtor's bankruptcy.

The economic court in Kyiv region, after considering an application from private joint-stock company AeroSvit Airline, on December 29, 2012 commenced proceedings on the bankruptcy case and introduced a moratorium on the satisfaction of the claims of creditors. The ruling was issued to appoint a readjustment procedure in the future to restore the airline's solvency, and to ensure the fulfillment of its liabilities to creditors, the press service of AeroSvit reminded.

The press service said that a copy of the ruling was sent to the Chief Justice Department in Kyiv region at the beginning of the month.

AeroSvit demanded the urgent cancelation of the illegal decision of the law-enforcement service, which it said impedes the fulfillment of current liabilities by the airline to passengers, contractors and employees.

AeroSvit has applied to Prosecutor General's Office and National Bank of Ukraine to promote the urgent cancelation of the illegal arrest of its funds.

As reported, the economic court in Kyiv region, after considering an application from private joint-stock company AeroSvit Airline, on December 29, 2012 commenced proceedings on the bankruptcy case. The case will be heard on January 23, 2013.

The court also ruled to introduce a property management procedure for the airline, and appointed arbitration manager Leonid Talan as its property manager.

The ruling says that as of December 27, 2012, the airline had a debt of UAH 4.27 billion to its creditors. According to the balance sheet, as of September 30, 2012, the total assets of AeroSvit stood at UAH 1.467 billion.

The airline later said that the submission of the claim was made as a part of its restructuring to launch a readjustment procedure, to restore the airline's solvency, and to ensure the fulfillment of its liabilities to creditors.

AeroSvit was created in 1994. It is based at Boryspil airport in Kyiv. It previously served 80 international destinations in 34 countries, and provided services to the largest cities of Ukraine. Its fleet consisted of 28 Boeing aircraft, including 20 medium-range Boeing 737s and eight long-haul Boeing 767s. In addition to that, it operated Airbus 320, Airbus 321, Embraer 145, Embraer 190, and ATR-72 aircraft.