Airline Avianca will move its address to the UK for greater tax benefits. This was stated on Tuesday by special media ‘Bloomberg’, in the framework of the final hearing to approve the restructuring plan and the company’s exit from Chapter 11.
According to the outlet, this decision surprised the judge overseeing the company’s proceedings, Martin Glenn, who said he was “not happy” with the fact that this “previously unknown”.
(So will the new seats Avianca is offering for your ride).
The new owners will benefit if the company goes bankrupt under UK business restructuring rules, Glenn said. Because they can save their capital even though there are objections from creditors, he said..
Under the US bankruptcy code, all creditors must receive full payment before their owners get anything in return.
The company’s attorney Evan Fleck noted that the company chose the UK to get the tax benefits and added that the decision to become a UK corporate entity was made after the reorganization process was underway.
(Avianca Board approved the presentation of the reorganization plan).
It is important to point out that prior to the pandemic and entering the process, Avianca was founded in Panama and operated from Colombia.
Similarly, the airline determines that it is the address that will be changed, not the corporate headquarters.
“The proposed domicile of the new parent company in the UK is based on the fact that Chapter 11 rules and process decisions are recognized in the region. Therefore, the new domicile does not imply a change in the operations or existence of the company. company. airlines in their respective jurisdictions“explained Avianca.
Tuesday is held final decision to decide whether to approve Avianca’s plan to reduce debt of about US$3 billion and hand over the property to lenders. However, the trial was adjourned.