Justice Approves Bankruptcy of Avianca Brasil Airline

Inactive since May 2019, airline has not paid employees and creditors

São Paulo

On Tuesday (14), São Paulo Court approved the bankruptcy of the airline Avianca Brasil at the request of the company itself, which had debts in excess of R$ 2.7 billion. The company has been in bankruptcy since December 2018, and inoperable since May last year.

Judge Tiago Limongi's decision, of the 1st Bankruptcy and Judicial Reorganization Court of São Paulo, states that Avianca's judicial reorganization plan has become unworkable considering the company's inactivity.

FILE PHOTO: A logo of aviation company Avianca is pictured at the headquarters building in Bogota, Colombia August 29, 2019. REUTERS/Luisa Gonzalez/File Photo ORG XMIT: FW1 - REUTERS

The magistrate gave the company 60 days to list its assets, but creditors estimate that the company no longer has assets to pay off any debt.

The airline has not paid even the labor claims, which have preferential payment in the judicial reorganization plan. Avianca Brasil had more than 5,300 employees, according to the union of airmen (ground workers) in São Paulo.

The company, which had an 11% share in the domestic market, went into crisis in 2018 and stopped paying lease contracts for aircraft and engines in its fleet, which came to have more than 50 planes, all leased.

Translated by Kiratiana Freelon

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