Virgin Atlantic was in court in the UK yesterday for a hearing regarding its solvent recapitalisation plan announced last month. During the court proceedings, Virgin Atlantic’s disclosed that is has filed for Chapter 15 bankruptcy in the US as part of the same plan.
A Virgin Atlantic spokesperson said: “Following the UK hearing held yesterday (4th August), ancillary proceedings in support of the solvent recapitalisation were also filed in the US under their Chapter 15 process. These ancillary US proceedings have been commenced under provisions that allow US courts to recognise foreign restructuring processes.
“In the case of Virgin Atlantic, the process we have asked to be recognised is a solvent restructuring of an English company under Part 26A of the English Companies Act 2006.”
Chapter 15 supports the solvent recapitalisation of the airline and is not to be confused with the Chapter 11 bankruptcy protection filing.
In a statement to reassure customers following the headlines that it had filed for US bankruptcy, the airline confirmed that it continues to operate a limited schedule flying to Hong Kong, New York, Los Angeles and Barbados from London Heathrow base, and that all upcoming flight and holiday bookings remain valid.
A Virgin Atlantic spokesperson said: “In order to progress the private-only solvent recapitalisation of the airline, the Restructuring Plan is going through a court-sanctioned process under Part 26A of the Companies Act 2006, to secure approval from all relevant creditors before implementation. With support already secured from the majority of stakeholders, it’s expected that the Restructuring Plan and recapitalisation will come into effect in September. We remain confident in the plan.”
The restructuring plan was announced on 14 July 2020 https://www.aviationnews-online.com/airline/virgin-atlantic-secures-restructuring-cash-delta-air-lines-covid-19-update/ . At yesterday’s procedural court hearing, Virgin Atlantic obtained an order from the Court to convene meetings of affected creditors to vote on the restructuring plan on 25 August.