A Mexican judge has declared Mexicana de Aviacion, one of Latin America's oldest airlines, bankrupt and ordered the sale of the debt-ridden company's assets, a court said Friday.
The company, founded in 1921, had suspended its operations in August 2010 and was under a form of bankruptcy protection allowing the company to negotiate with creditors and make restructuring plans.
Investors expressed interest in the company but a financial rescue never materialized, despite extensions given by the court to provide the company more time to find a solution.
A district judge declared the company "in a state of bankruptcy" and ordered the sale of "rights and assets" to pay back lenders, the Federal Judicial Council said in a statement.
Two subsidiaries, Click and Link, were also declared bankrupt.
When it suspended operations, Mexicana had $786 million in assets and debts totaling $864 million.
The airline used to fly to 22 countries, carrying 22,000 passengers per day. The company had 8,500 employees who have held protests demanding their jobs back.
A union official vowed to appeal the judge's ruling.
"What we care most about is the workers and that their rights are upheld," Ricardo del Valle, secretary general of the Flight Attendants Union Association, told Radio Formula.
The attorney general's office has sought since February the arrest of Mexicana's former owner, Gaston Azcarraga. Authorities asked help from Interpol, the global police agency, because they believe he left Mexico.