Varig preliminary injunction extended to April 28

By Caroline Salls

Pittsburgh, March 15 - Varig, SA's preliminary injunction in its Section 304 bankruptcy case was extended to April 28 from March 21, according to a Friday filing with the U.S. Bankruptcy Court for the Southern District of New York.

The preliminary injunction was previously extended to March 21 from Jan. 13, and the company was ordered to pay overdue post-bankruptcy aircraft rental and maintenance fees to its aircraft lessors.

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 to consider converting the injunction to a permanent injunction is scheduled for April 27.

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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