Brazilian airline Gol sped up bankruptcy plan after news leaked

Gol Linhas Aereas Inteligentes SA filed for bankruptcy protection in the US sooner than it planned after word about the insolvency filing leaked to the media, a lawyer for the low-cost Brazilian airline said in a video-court hearing on Friday.

The timing “frankly was not of the debtor’s choosing,” company attorney Evan Fleck told US Bankruptcy Judge Martin Glenn. To prevent creditors from taking actions that could disrupt its assets, management sought court protection in New York on Thursday.

By filing a Chapter 11 bankruptcy case, the company is able to block any effort by creditors to seize airplanes or other property. In the US, such insolvency cases allow a company to keep operating while it creates a plan to slash debt and reorganize operations.

The Sao Paulo-based company will return to court on Monday to seek approval of a new loan to help it stay in business while in bankruptcy. Gol Linhas has secured $950 million in financing from a group of bondholders, according to a statement.

The company has grappled with a heavy debt burden and saw investors question its ability to navigate a rebound in the air travel industry across the region. After initially avoiding the fates of pandemic-scarred peers, the carrier last year hired Seabury Capital to help review its debt and other financial obligations. 

The case is GOL Linhas Aereas Inteligentes S.A., 24-10118, US Bankruptcy Court, Southern District of New York (Manhattan).