Virgin Atlantic Files for Chapter 15 Bankruptcy Protection in the US
Richard Branson’s Virgin Atlantic airline filed for Chapter 15 bankruptcy protection in New York on Tuesday as the coronavirus pandemic is still restricting global travel. Chapter 15 of the US Bankruptcy Code designed to facilitate cooperation between US courts and foreign bankruptcy courts. It was added to the code in 2005 by the by the Bankruptcy Abuse Prevention and Consumer Protection Act, Business Insider explains. It protects Virgin’s US assets from creditors as the airline works to finalize a rescue plan.
Virgin Atlantic has said it will run out of cash next month unless it secures approval for a 1.2 billion-pound ($1.6 billion) rescue package announced in July. The London-based airline flies exclusively long-haul international routes. It suspended operations in April when the coronavirus pandemic started causing havoc on travel, and then resumed flights again in July.
Delta owns 49% of Virgin Atlantic and Richard Branson’s Virgin Group owning the remaining 51%.