Brazilian bankruptcy court wants Varig re-auction on July 12

0 Comments | AFP, July, 2006

RIO DE JANEIRO (AFP) — A Brazilian bankruptcy judge has proposed a re-auction of ailing airline Varig on July 12, for an offer of 490 million dollars, the Rio de Janeiro court said.

The judge, Roberto Ayoub, called a July 10 meeting of Varig's creditors to consider the offer and, if it is accepted, the company will be auctioned two days later, the court said.

Varig has been operating under bankruptcy protection since June 2005. According to the bankruptcy law, a direct sale of the company is prohibited and any takeover must be conducted by auction.

The US-Brazilian consortium Volo do Brasil, grouping US investment fund Matlin Patterson and Brazilian investors, offered 490 million dollars for Varig a week ago, after Ayoub cancelled its sale to a group of...