Varig preliminary injunction extended to Nov. 29

By Caroline Salls

Pittsburgh, Oct. 25 - Varig SA obtained an extension to its preliminary injunction to Nov. 29 from Oct. 27, according to a Wednesday filing with the U.S. Bankruptcy Court for the Southern District of New York.

Varig's preliminary injunction has been extended several times throughout its 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 Nov. 29 is scheduled for Nov. 28.

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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