If Brazil’s Bankrupt Varig Is Sold 7,500 Workers Would be Fired and 40 Planes Retired

Luiz Roberto Ayoub, the judge who presides in the Rio de Janeiro business court that is handling the Brazilian airline Varig case has decided to postpone the assembly of Varig creditors scheduled for next Monday, July 10.

That means a second auction, which should take place two days after the creditor assembly, is also postponed. There is no new date for the creditors’ meeting.

According to court spokespersons, it has not been possible to conclude the examination of the proposal by VarigLog, the former Varig subsidiary which now wants to buy the moribund ex-parent company.

VarigLog’s wants to use only 2,500 workers in the new Varig if it wins the action. The 7,500 other workers would stay with the old Varig, which also would keep all the debts of the company. From the 60 planes Varig has (only 31 are being used at present) only 20 would be enough for the new Varig.

The court (Administrador Judicial) and government legal officials (Ministério Público) must agree that the proposal is viable. It is reported that Volo Brasil, which controls VarigLog, was finalizing its presentation yesterday afternoon.

Spokespersons for Volo Brasil declared that the organization was opposed to a postponement of the assembly and the auction because it is shelling out money to keep Varig operating on a daily basis. So far it has paid over US$ 7 million in current operating costs just to keep the company flying. VarigLog is willing to pay US$ 495 million for what’s left of Varig.

Ayoub, in declarations to the media, said there are questions regarding the minimum price to be asked for the Varig Operacional (which will maintain the airliner’s routes).

Ayoub also pointed out that anyone interested in bidding besides Volo must make a judicial deposit of US$ 22 million. That money would cover the expenses VarigLog is having to maintain Varig afloat in case it loses the coming auction.

ABr

Tags:

You May Also Like

FIFA Denies it Had Threatened to Take World Cup Away from Brazil

Dilma Rousseff, the president of Brazil, had a “positive meeting” with FIFA general secretary ...

Brazil: China Lifts Soy Ban

Brazil should resume soon its shipment of soy to China, after a two-month-long embargo. ...

Brazil Sends Teachers to East Timor

Brazilian teachers are going to help restructure education in East Timor. The Foundation for ...

Brazil Empire Lives On

Brazil has not completely finished the process of becoming a Republic. Nor has it ...

Brazil Gets WTO’s Green Light to Retaliate Against US

The World Trade Organization has authorized Brazil to retaliate against the United States because ...

Biotech Crops Curb Erosion and Pollution in the US and Brazil, Says GM Crowd

Since the introduction of biotech crops in 1996, farmers have reduced – and, in ...

Brazilian Rebel

In 1986 Darci Frigo was accused of defamation for exposing a federal representative who ...

Brazil’s Congressional Enquiry Tracks Election Money in the US

Members of Brazil’s Joint Parliamentary Investigatory Commission (CPMI) on the Post Office will travel ...

Incubator Center in Brazil Hatches a Hit: Robot Football

Have you ever imagined a football game played by robots? Well what may seem ...

Brazil’s Dilemma: Moratorium or Euthanasia

Once in a while, certain important questions, some even transcendental ones, emerge from dealing ...

WordPress database error: [Table './brazzil3_live/wp_wfHits' is marked as crashed and last (automatic?) repair failed]
SHOW FULL COLUMNS FROM `wp_wfHits`