Virgin Atlantic has filed for Chapter 15 bankruptcy protection in the U.S. courts on Tuesday. Filing under Chapter 15 bankruptcy protection shelters the US assets of foreign companies undergoing restructuring processes in their home country. Virgin Atlantic, like any other in the aviation industry has been hit hard by the collapse in air travel due to the pandemic.
Facing severe liquidity crunch, the U.K based Virgin got a go-ahead from the London judge to call a meeting of its creditors on 25th August, to get an approval for its planned £1.2 billion ($1.5 billion) recapitalization plan.
As a part of the recapitalization plan, US hedge fund Davidson Kempner is providing £150 million ($188 million) in secured financing and Richard Branson’s Virgin Group is contributing £200 million ($262 million).