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Luiz Roberto Ayoub, the judge who presides in the Rio de Janeiro business court that is handling the Brazilian airline Varig case has decided to postpone the assembly of Varig creditors scheduled for next Monday, July 10.
That means a second auction, which should take place two days after the creditor assembly, is also postponed. There is no new date for the creditors' meeting. According to court spokespersons, it has not been possible to conclude the examination of the proposal by VarigLog, the former Varig subsidiary which now wants to buy the moribund ex-parent company. VarigLog's wants to use only 2,500 workers in the new Varig if it wins the action. The 7,500 other workers would stay with the old Varig, which also would keep all the debts of the company. From the 60 planes Varig has (only 31 are being used at present) only 20 would be enough for the new Varig. The court (Administrador Judicial) and government legal officials (Ministério Público) must agree that the proposal is viable. It is reported that Volo Brasil, which controls VarigLog, was finalizing its presentation yesterday afternoon. Spokespersons for Volo Brasil declared that the organization was opposed to a postponement of the assembly and the auction because it is shelling out money to keep Varig operating on a daily basis. So far it has paid over US$ 7 million in current operating costs just to keep the company flying. VarigLog is willing to pay US$ 495 million for what's left of Varig. Ayoub, in declarations to the media, said there are questions regarding the minimum price to be asked for the Varig Operacional (which will maintain the airliner's routes). Ayoub also pointed out that anyone interested in bidding besides Volo must make a judicial deposit of US$ 22 million. That money would cover the expenses VarigLog is having to maintain Varig afloat in case it loses the coming auction. ABr
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What makes the owners of Varig Log think there can do any better if they have the same turkeys working for them that were the demise of the carrier in the first place? Clean the house now and forever!