Unions have claimed the Flixbus, its holding company, refused to look for a buyer and is taking advantage of the coronavirus pandemic to axe jobs.
ADVERTISEMENTA French court on Tuesday placed long-distance coach company Eurolines into compulsory liquidation, a lawyer for the firm's employees told AFP.
After 35 years, the French transport giant will stop operations on Friday.
It came after Eurolines was bought out by German group FlixBus last year, but unions have claimed the holding company refused to look for a buyer and is taking advantage of the coronavirus pandemic to axe jobs.
At the end of June, FlixBus asked for bankruptcy proceedings be opened for its subsidiary, but the court requested that the Eurolines continue to operate under court administration for one month.
"Flixbus has emptied Eurolines of its substance, is going to regain market share and is now trying to get rid of the employees without paying anything," Pierre-François Rousseau, a lawyer representing Eurolines employees, told AFP
He said the German brand had used the economic crisis resulting from the COVID-19 pandemic as a pretext.
When asked by Euronews, Eurolines' management said it did not want to comment on the court's verdict but said in an emailed statement that insolvency proceedings against the 36 people still employed by Eurolines were "inevitable due to the financial situation in which the company finds itself."
It added the firm's financial difficulties were "suddenly and strongly aggravated by the health and economic crisis caused by the COVID-19 pandemic, which has hit all road passenger transport and caused an unprecedented global drop in demand."
Flixbus had undertaken efforts to save Eurolines in the form of significant investments and a reorganisation plan, among other measures, the statement said.
Around 20 employees were present in front of the courtroom for the proceedings, which were held behind closed doors.