According to the recent media reports, Virgin Atlantic on Tuesday had filed for protection in the US bankruptcy court, as it tries to recapitalise itself in efforts to sustain the coronavirus crisis.
The filing of chapter 15 bankruptcy protection in New York, shelters the US assets of foreign companies undergoing restructuring proceedings in their home country.
Virgin Atlantic last month had unveiled a GBP 1.2 Billion restructuring deal to keep the airline solvent days before resuming its passenger flights. The plan already has a support of its existing shareholders that includes Delta Airlines (DAL)
To clear the air on the matter, company in its statement said: “Following our return to the skies, we’re currently operating our flying schedule from our London Heathrow base and these flights continue as normal. All upcoming flight and holiday bookings remain valid; Flying Club members can continue to earn and redeem their miles as usual; customers with cancellations can continue to rebook to request refunds and these are being processed ; and our people are ready to ensure you Fly Safe and Fly Well.
As announced on 14th July, we have taken a big step forward in securing our future, by launching a court backed process as part of a solvent recapitalisation of the airline and holiday business. The approval process is in motion, and we expect the recapitalisation to come into effect in September.
The Chapter 15 filing in the United States is a procedural application to allow the US courts to recognise the restructuring process we are undertaking – in this case, the solvent recapitalisation of the airline under English Law. Once approved and implemented, our plan will keep Virgin Atlantic flying.