How long can Avianca Holdings take to get out of bankruptcy law – Business – Economy

After Avianca Holdings filed the application to file for Chapter 11 of the United States Bankruptcy Code, its managers noted that the process could take 12 months.

However, those who know about these processes explain that the time may be longer, since it is not only about reorganizing the operation of the company, but also materializing arduous negotiations with creditors, shareholders, employees and entities such as Dian.(It may interest you: These are Avianca Holdings’ top five creditors)

In a trill on Twitter, Juan David Ballén, director of Analysis and Strategy of the brokerage Casa de Bolsa, indicated that although under Chapter 11 companies manage their business to reorganize it and try to become profitable again, Business decisions that are important are ultimately made by the bankruptcy court.

And the files of the time show that the previous reorganization process took 21 months, since the airline accepted on March 21, 2003 and ended December 10, 2004.

During the reorganization process under Chapter 11 of the United States Bankruptcy Code, which Avianca, When owned by the Santo Domingo Group (Bavaria Values) and the National Federation of Coffee Growers (by Aces), there were events that lengthened the final approval of the agreement.

(Also read: Avianca gets approval to continue paying employees and suppliers)

According to information from the time, the first thing that happened, between April 7 to July 8
In 2003, two Avianca and 10 Aces routes were withdrawn, while in May the company returned three Boeing B757-200 planes and one Boeing B767-300 that were for lease.

In June of that year, Aces announced the return of the turbo-prop fleet consisting of eight ATR-42 aircraft and at the beginning of June the judge gave free access to a payment agreement with Dian for $ 8 million, and to develop a payment plan to the Colombian Civil Aviators Aid and Benefits Fund (Caxdac), to cover the all the pension allowances that would be disbursed during 2003.

(Also: Purchase of Avianca tickets, same after entering bankruptcy law)

Extensions also add up

But later, what took the process the longest was the preparation of the business plan, since the company requested, and they were granted, six 90-day extensions for management to present the business plan.

For March 18, 2004, the shareholders agreed to the entry of the Synergy Group, led by Germán Efromovich, as an investor 75% of the company would remain, and almost a month later Copa and Continental joined forces to present a formal proposal for the acquisition .

Beginning June of that year, Avianca’s board of directors selected Efromovich’s offer to be included in the reorganization plan and at the end of that month the terms of the plan were agreed with the Creditors Committee.

At the end of August 2004, the judge approved the reorganization, at the beginning of November his voting by creditors ended and on November 16, 2004 the judge confirmed the navigation letter of the reorganization and on December 10, 2004, in anticipation of Christmas, Avianca left Chapter 11, which begins to face again.

ECONOMY AND BUSINESS – THE TIME

– .