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Virgin Orbit Files For Bankruptcy

Virgin Orbit has filed for bankruptcy under Chapter 11 of the U.S. Bankruptcy Code.

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Zac Aubert

Zac Aubert

Tue Apr 04 2023Written by Zac Aubert

Virgin Orbit, the rocket firm established by British billionaire Richard Branson, has filed for bankruptcy under Chapter 11 of the U.S. Bankruptcy Code. The company made the announcement in the early morning hours of April 4, 2023. Virgin Orbit plans to use the Chapter 11 process to continue operations while it restructures it debts and looks towards the sale of the business while maximizing value for its business and assets.

"Despite taking considerable steps to resolve their financial position and acquire extra funding, they had to do what is best for the company" - Dan Hart, CEO of Virgin Orbit

The bankruptcy announcement comes just days after the company declared that it would lay off 85+% of its workforce to decrease expenses as it could not secure additional funding.

Virgin Orbit will continue operating in the ordinary course as a “debtor-in-possession” under the jurisdiction of the bankruptcy court and in accordance with the applicable provisions of the U.S. Bankruptcy Code. Virgin Investments Limited has committed to providing $31.6 million in new money DIP financing to help fund the process and protect its operations.

"The company’s cutting-edge launch technology will have wide appeal to buyers as they continue in the process to sell the Company" - Dan Hart, CEO of Virgin Orbit

Hart expressed gratitude and pride for every one of their teammates, both for the pioneering spirit of innovation they’ve embodied and for their patience and professionalism as they’ve managed through this difficult time.

Virgin Orbit filed customary motions requesting that the Court authorize the Company’s ability to use cash on hand and access the DIP financing to support this process, including payment of remaining employee wages and benefits without interruption. The Company intends to pay suppliers and vendors to the fullest extent possible pursuant to normal terms for goods and services provided on or after the filing date.

Virgin Orbit was founded in 2017 with the aim of making small rockets, called LauncherOne, that can deliver lightweight satellites to orbit quickly and cheaply. The rockets take off from modified Boeing 747 planes. The company ran into trouble in January 2023 when one of its rockets failed to make it to orbit because its engine overheated. It was the company’s first attempt to launch a satellite from UK soil. It had completed four previous successful launches from California.

Virgin Orbit is represented by Latham & Watkins as restructuring counsel, Young Conaway Stargatt & Taylor, LLP as local restructuring counsel, Alvarez & Marsal as restructuring advisor, and Ducera as investment banker. Virgin Group is represented by Davis Polk & Wardwell as restructuring counsel, Morris, Nichols, Arsht & Tunnell as local restructuring counsel, and FTI Consulting as financial advisor.