Brazil’s Varig Repays Part of Debt in US Court and Delays Bankruptcy

Brazilian bankruptcy-bound airline Varig informs that, pursuant to a ruling by the Court of New York, it deposited US$ 6.7 million, Wednesday, December 28, in partial payment of debts owed to US firms from which it leases some of its fleet.

The settlement was reached on December 21 at a hearing attended by the president of the company, Marcelo Bottini, and representatives of the leasing firms. The sum will be divided among the 15 airplane lessors.

Judge Robert Drain, of the Court of New York, decided to extend the legal protections on Varig’s planes until January 13. The grounds for the judge’s decision were that the Brazilian company had complied with Brazilian court rulings to present a Recovery Plan approved by its creditors, had reactivated aircraft that were out of service for maintenance, and had submitted a schedule for repaying its debts to the leasing firms.

According to the company’s press office, Varig plans to return to the Court of New York on January 13 with proof of the payments already made to the leasing firms. The company owes the leasing firms a total of US$ 44 million and expects to make good on US$ 19.7 million by the time of the next hearing in New York.

On January 8, Varig expects to present its recovery plan, backed by its creditors, to the 8th Business Court of Rio de Janeiro.

It was announced earlier this week that Varig will end on January 14, 2006, services to Japan via Los Angeles, as a measure to cut expenses. The air carrier has been placed under bankruptcy protection since June.

On January 14, the airline will end its service from São Paulo to Tokyo via Los Angeles as well as cut the number of employees at its Japanese offices and close other offices in Asia.

The company will keep its São Paulo to Los Angeles route, which is still profitable, but will trim the number of its employees in the Tokyo office and close other offices in Asia.

ABr

Tags:

Ads

You May Also Like

The Grass is Greener on Brazil’s Side

Tumucumaque Park is 568,000 acres larger than Slonga National Park in the Democratic Republic ...

Pan American Games Are Over. Brazil Now Wants the Olympics

In an very positive evaluation of the 2007 Pan American Games just held in ...

Brazil Wants to Know How President’s Chief of Staff Got 20 Times Richer in 5 Years

In Brazil, revelations of a several times surge in the personal wealth of president’s ...

Hilary Clinton: We Expect Thousands of Brazilian Students in the Next Few Years

US Secretary of State Hillary Clinton delivered the opening remarks at the “Brazil-U.S.: Partnership ...

Brazil Greenlights Transgenics and Stem Cell Research

Brazil’s Chamber of Deputies ended the controversy over the cultivation of genetically modified seeds ...

Brazilian General Accuses Lula of Lack of Independence for Opposing US Bases

Brazil magnified the importance of the deployment of US troops in Colombian military bases, ...

Art and Social Inclusion Out of Discarded Wood in Brazil

In the hands of five artisans from the outskirts of São Paulo, discarded wood ...

Most Kids in Brazil’s Shelters Are Not Orphans. 87% Have Family.

What is referred to as structural violence is the main reason that Brazilian children ...

IMF Values Private Investment in Brazil

The Director of the Fiscal Affairs Department of the Monetary International Fund (IMF), Teresa ...

Brazil Wants to Know if Facebook and Google Are Involved in Spying the Country

The Brazilian government started an inquiry into whether telecommunications companies operating in Brazil cooperated ...