Avianca airline will move its domicile to the UK with the aim of gaining greater tax advantages. This was stated on Tuesday by the specialized media ‘Bloomberg’, in the framework of the final hearing to approve the restructuring plan and release of the company from Chapter 11.

According to the outlet, this decision surprised the judge overseeing the company’s proceedings, Martin Glenn, who said he was “not satisfied” with this decision. “unknown before”.

(This is how new seats Avianca has to offer for your trip).

The new owners would benefit if the company went bankrupt under UK company restructuring rules, Glenn said. That’s because they can maintain their capital despite objections from creditors, he said..

Under US bankruptcy law, all creditors must be paid in full before the owner can get anything in return.

The company’s lawyer, Evan Fleck, said the company chose the UK to get him tax advantages, adding that the decision to become a UK corporate entity was taken late in the reorganization process.

(Avianca’s board approved the presentation of the reorganization plan).

It is important to mention that before the pandemic and entering the process, Avianca was founded in Panama and operated from Colombia.

Likewise, the airline determines that it is the address that will be changed, not the company’s headquarters.

“The proposal for a new ‘parent’ company domicile in the UK is supported by the fact that Chapter 11 process rules and decisions are recognized in the territory. Consequently, a new domicile does not imply any change in the operations or presence of an airline in the respective jurisdictions.Avianca clarified.

This Tuesday is celebrated final hearing to decide whether to approve Avianca’s plan to reduce debt by about US$3 billion and hand over property to lenders. However, the trial was adjourned.

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