Virgin Atlantic files for bankruptcy-- Chapter 15
 

https://www.theverge.com/2020/8/4/21...son-chapter-15

Wonder how this will impact DL codeshare flights to LHR, If the Clubhouse there will ever reopen, etc...

Filed in the NY because of stronger US Bankruptcy laws vs. UK Administration, I assume. Same reason LATAM also filed in the US.

It is a Chapter 15 filing, so I think there also needs to be a foreign bankruptcy proceeding? E.g. a foreign entity with assets in the US can file under Chapter 15, but not in the absence of/as a complete substitute for, a foreign bankruptcy petition. I may be wrong? I haven't been following closely, but did VS enter administration in the UK already?

They filed under Chapter 15, not 7 which is full liquidation or 11 which is a reorganization of the whole company. My VERY limited understanding is that filing this way allows them to reorganize their US operations without affecting other aspects of their business in other countries. Whatever in hell that means. Hopefully someone with some real knowledge about Chapter 15 will fill us in.

Looks like this is tied to the rescue package that was announced earlier this year. Sounds like that has not yet finalized and they are seeking to protect their US assets if they can't complete that rescue and receive the cash infusion before they run out of money in September. It would appear this isn't new issues coming to surface but rather part of the process they started when they announced the rescue package in July.

https://news.bloomberglaw.com/bankru...kruptcy-in-u-s
https://www.bloomberg.com/news/artic...kruptcy-in-u-s

So which Delta joint venture partners haven't filed for bankruptcy?

It would be an ancillary proceeding to a cross-border case.

I'd expect that the non-US airlines that filed their Ch. 11 petitions in the USA (which would be the principal case) filed similar ancillary proceedings in their "home countries" pursuant to the Model Law on Cross Border Insolvency (if enacted there).

I doubt there are many Chapter 15 experts anywhere, although I expect that expertise is happening on the fly now. Next up for on the fly expertise, Chapter 9.

The new name for the lounges will be the Doghouse and they will auction off the furniture, food, and beverages to raise funds to continue flying:) Does not look good for VS. May be about time to sell of their assets which will likely have more value in an auction than actually using them at this point.

Who wants and can buy lots of airline assets now, even really cheap? They' re not planning to dissolve the company, only reorganize (hopefully). My guess is that the main role of a Chapter 15 filing is to prevent anyone from seizing or impounding any assets that might be permanently or temporarily located in the USA while bankruptcy details are worked out elsewhere.

BTW, does anyone know whether VS owns or leases its aircraft? Do they have any Boeing or Airbus orders (production slots) that could be of any value to another carrier?

Branson has said that the Delta partnership has been amazing for Virgin, so I would be very surprised if anything changed there.

I would expect that when Virgin returns to T3, the LHR Clubhouse will reopen. I have less faith in some of the US lounges coming back at airports where an Air France or Delta lounge may be an option. JFK seems like it will stay because the market is competitive, but if push comes to shove, who knows.

This is a shrewd business move by a very smart but self-focused CEO. Had he managed his company better he wouldn’t have to do any of this. Instead he wants to make sure he doesn’t pay for any of the downside his company is experiencing.

Well at least he has offered to do this:

https://www.businessinsider.com/rich...ranson%20said.

yeh he made that offer long ago. The story is from April. He came out early begging for government aid from UK and Australia for his various airlines.

Keeping my fingers crossed for them. I've always been drawn to the Virgin (Atlantic) brand long before I traveled to London for the first time. I don't know much about the business side, especially outside the US, but It's always baffled me why VS didn't offer flights to big centers in Europe. Not so much to compete with BA, which is tough, but to tie in people that love the brand. But, for some reason VS can't even get a regional operation going. Little Red was great. We still talk about what a great service it was despite traveling to Scotland several times after it went under (and now we have to "connect" to BA to fly to Scotland).

Virgin has a nice Clubhouse in T2 at LAX. Since Delta is basically taking over T2 and T3 I am guessing the Clubhouse could consolidate with Delta's lounge. Still sad.

I'm still waiting for $500+ worth of taxes/fees refund from two award flight cancellations in June 2020. Does that make me a US creditor? Does Chapter 15 mean that VS is released from responsibility to refund?

Unless the UK and USA governments agree to let airlines such as VS take passengers between the two countries, there isn't much sense for VS to exist. This lockdown has got to end soon. I'm a fan of VS and have enjoyed every flight I've ever taken on them, and I've sat in all classes that they offer.

When things get back to normal I hope they make the VS Clubhouse in IAD a SkyClub (serve tap beer and rail liquor in the mornings and early afternoons, and operate it as a Clubhouse in the 4 hour period before the VS nonstop to LHR).