Ozbiggles is the dumb bastard. There is a whole industry that exists to buy up ‘’worthless” bonds in default and then taking the issuer to court. I already told you what the operative legal doctrine is/; “Pari Passu”. Virgin doesn’t get to (a) default on its bonds, then (b) borrow money from the Federal Government, Bain or anyone else and eventually pay those creditors back without paying out the original bond holders first.
‘’To put that another way, Virgin doesn’t get to select which unsecured creditors it pays out by $#$%ing over some and then paying others. They must all rank equally while Virgin exists.
To put that yet another way, if Virgin defaults on its bonds, then borrows two billion from Bain and then pays interest on those monies out of its revenues that is potentially technically illegal under Pari Passu..
‘They bond holders are within their rights to demand to discover the details of the deal and based on my limited knowledge, I wouldn’t be surprised if it was discovered to stink to high heaven, in that Virgin DOES have the capacity to repay bond holders over time and remain a viable airline WITHOUT screwing over the bond holders and other unsecured creditors. As a general rule, to extinguish the bond holders rights, the company must be liquidated and the bond holders paid out what little remains.
To put that another way, just because Bain and Deloittes act as if there are no bickies in the jar doesn’t make it true. Deloittes are probably just stupid. Bain???
I’m sorry for the staff, they are blameless in this mess.