The airline of British businessman Richard Branson is about to fall over due to the corona crisis and could not rely on government support.
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 in the day, Virgin Atlantic reported to a British court that its treasury, with no rescue package worth £ 1.2 billion ($ 1.3 billion), will be empty next month. The company, 51 percent owned by Branson, hopes that the UK judge will declare the rescue plan binding on all creditors.
Under that rescue plan, debts owed by Air France-KLM’s collaborative partner are deferred or waived, including by the Virgin Group of billionaire Branson herself. In addition, certain creditors, including co-shareholder Delta Air Lines, can convert their loans into shares. Suppliers are asked to cancel part of their claims with the ailing airline.
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