Virgin Atlantic Airways has filed for bankruptcy in a United States court months after it made job cuts and closed its Gatwick base amid the coronavirus pandemic.
The airline, which is 51% owned by Branson's Virgin Group and 49% by US airline Delta, filed for bankruptcy in the southern district of New York today.
In the filing, the airline said it has negotiated a deal with stakeholders "for a consensual recapitalisation" that will get debt off its balance sheet and "immediately position it for sustainable long-term growth".
The US filing is in addition to a proceeding filed in a British court, where Virgin Atlantic obtained approval to convene meetings of affected creditors.
A Virgin Atlantic spokesman said the restructuring plan was before a British court "to secure approval from all relevant creditors before implementation".
The US filing seeks protection from creditors in the United States under Chapter 15 of the US Bankruptcy Code, which allows a foreign debtor to shield assets in the UK.
It said it needed to recapitalise "to not only survive the exigent threats posed by the Covid-19 global pandemic but to thrive once the immediate global health crisis passes."
In May, Virgin Atlantic slashed over 3,000 jobs after Richard Branson failed to secure a £500m Government loan to keep the airline afloat during the coronavirus pandemic.
The airline has over 10,000 UK staff and operates from Gatwick, Heathrow and Manchester.
It comes after billionaire Virgin boss Branson – who has a personal fortune of £3.5billion – sparked fury for begging Number 10 for an enormous £500million bailout after the pandemic closed thousands of routes.
But he was forced to put parts of the airline up for sale, even though he offered his Caribbean island up as collateral.