Virgin Atlantic wins US protection on restructuring plan
Virgin Atlantic Airways has been granted US bankruptcy protection as the carrier controlled by Richard Branson pursues a EUR 1.2 billion rescue plan in the UK.
The provisional ruling in Manhattan protects the airline's American assets and ensures that the debt re-organisation will be overseen under the British legal process. After Virgin's next major restructuring step in the UK, the company will return to the US court in September asking to make the protections permanent.
That next step will be a meeting of creditors scheduled for August 25 where any holdouts can be forced to accept the restructuring even if some classes vote against it. Virgin Atlantic says that only one of four creditor groups, comprising trade suppliers, hasn't backed the plan yet.
The rescue will bring in new money from Branson and US hedge fund Davidson Kempner Capital Management, while requiring a restructuring of existing debt.