The Eleventh Civil Court of Santiago in Chile has declared LAW - Latin American Wings (Santiago de Chile) formally bankrupt, Cooperativa.cl has reported.
The decision paves the way for the seizure of all remaining assets of the airline to repay debt towards former employees and vendors.
An official representing the defunct carrier in the court admitted that the remaining assets will not be enough to cover all liabilities. The total debt of LAW is estimated at USD23 million, with a large portion of it owed to former employees.
Recently, another court in Santiago seized four B737-300s formerly leased by LAW on the account of the debt. It is unclear whether this move will have any effect since all four units are owned by lessors and not by LAW. In addition, one of the jets has already been repositioned to Tampa International.
The carrier suspended operations on March 10, 2018, amid financial difficulties caused, in part, by Chile's increasingly tight domestic market. On March 13, hours before LAW's planned resumption of operations, the Chilean civil aviation authority (Dirección General de Aeronáutica Civil - DGAC) suspended the carrier's Air Operator's Certificate before revoking it in full in mid-May. The carrier later challenged the decision and sought to reverse it on procedural grounds but to no avail.
