Varig foreign debtors object to lessors' request for relief from injunction

By Caroline Salls

Pittsburgh, Aug. 30 - Varig SA's foreign representatives objected to aircraft lessors International Lease Finance Corp. and Willis Lease Finance Corp.'s request for relief from a preliminary injunction in the company's Section 304 bankruptcy case, according to a Monday filing with the U.S. Bankruptcy Court for the Southern District of New York.

The injunction prohibits a lawsuit, action, enforcement process or proceeding or claim or demand of reclamation for any leased aircraft.

The injunction also keeps parties, including creditors, employees and utility providers, from terminating contracts for goods and services that would "threaten the contemplated restructuring."

The foreign representatives said the injunction should continue for an additional brief period to allow a pending financing transaction to proceed.

According to the objection, the financial transaction would cure all arrearages under the aircraft leases and provide adequate assurance of current payments of all leases and other operating expenses through completion of the restructuring process.

Also, the objection said termination of the injunction would "risk the immediate and irreparable destruction of business to the detriment of all [Varig's] creditors."

A hearing on termination of the preliminary injunction was scheduled for Tuesday.

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

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.