Varig preliminary injunction extended to March 19

By Jennifer Lanning Drey

Portland, Ore., Jan. 10 - Varig SA obtained an extension to its preliminary injunction to March 19 from Jan. 11, according to a Wednesday filing with the U.S. Bankruptcy Court for the Southern District of New York.

The injunction has now been extended 13 times over the course of the company's year-and-a-half-long Section 304 bankruptcy case, amid objections from aircraft lessors who said the company has failed to pay rent and maintenance fees on the aircraft.

As previously reported, the injunction prohibits a lawsuit, action, enforcement process or proceeding, or claim or demand of reclamation for any leased aircraft and keeps creditors, employees and utility providers from terminating contracts for goods and services that would "threaten the contemplated restructuring."

A hearing on whether to extend the preliminary injunction beyond March 19 is scheduled for March 16.

Varig, a Rio de Janeiro, Brazil-based air carrier, filed for Section 304 bankruptcy on June 20, 2005. Its case number is 05-14400.

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