Virgin Atlantic files for bankruptcy protection in the US

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Virgin Atlantic has started a so-called Chapter 15 procedure in New York. In doing so, non-U.S. Companies in the U.S. are seeking filing for deferment, protecting them from creditors’ legal claims.

Earlier Tuesday, Virgin Atlantic reported to a British court that its treasury, with no rescue package worth £ 1.2 billion ($ 1.3 billion), will be empty in September. The company, 51 percent owned by Branson, hopes that the UK judge will declare the rescue plan binding on all creditors.

Under that bailout, Virgin Atlantic’s debts are deferred or forgiven, including billionaire Branson’s own Virgin Group. In addition, certain creditors, including co-shareholder Delta Airlines, can convert their loans into shares.

Suppliers are asked to cancel part of their claims with the ailing airline.

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