The London-based company, 49% of which is owned by Delta Airlines, serves passengers on long international routes. It was forced to suspend all flights in April due to the outbreak of the virus, and resumed them last month.
The application under Section 15 is a type of Bankruptcy For companies operating in several countries, and in fact allows companies undergoing this procedure in their home country, also conduct a procedure in the US. In this way you will be able to protect its assets there from creditors in the UK.
Virgin Atlantic announced in July a $ 1.6 billion self-help package, but did not reach final conclusions on the matter. Yes has unsuccessfully sought the help of the British government, with Branson even offering his private island as collateral. Earlier, in May, it announced it would lay off 3,000 workers and close its operations at London Gatwick Airport and relocate it to Heathrow.
The company said today at a hearing in a London court that it will run out of cash in September. The application filed in the U.S. is related to this hearing, in which the court approved a creditors’ meeting to vote on a plan for reorganization.
Delta Airlines CEO Ed Bastian recently said the company he heads will not cash in on rescuing Virgin Atlantic from bankruptcy. Under UK law, Delta or any other foreign company will not be able to increase their stake in Virgin.
Both companies did not respond to a request for protection from U.S. creditors.