Virgin Atlantic US Files For Chapter 15 Bankruptcy
Virgin Atlantic US has filed for chapter 15 bankruptcy protection in the United States, to help stop debtors from demanding payments or seizing assets during the pandemic.
Virgin Atlantic (US) has filed for Chapter 15 bankruptcy (via the Guardian) due to the ongoing COVID-19 pandemic.
A Virgin Atlantic spokesperson said that the company was pursuing a 'solvent restructuring' under British law. The filing means the airline is not yet going into liquidation or going out of business - but the company warned that if a deal with creditors isn't reached, it could run out of cash by September.
Chapter 15 bankruptcy is not the same as going into administration here in the UK. It's more of a strategy to stop the people the company is in debt to from demanding payments in times of financial difficulty by protecting assets. It's similar to what the owners of Cirque du Soleil did in June. During this phase, the company hopes to shield assets as they reorganise the company to save it from actually going bankrupt.