The United States Department of Justice has objected to a request from Spirit Airlines (NK, Fort Lauderdale International) and its Cayman Islands subsidiaries for a December 17 expedited hearing for a disclosure statement and reorganisation plan at the US Bankruptcy Court for the Southern District of New York.

The United States Trustee Program, a part of the DOJ responsible for ensuring that bankruptcy processes adhere to the law, argued that the request was "premature and should be withdrawn without prejudice to renew at a time when more information is known about these cases and all parties have had a meaningful opportunity to review the documents." It highlighted that the airline filed for Chapter 11 restructuring on November 18, followed by the filings of the Caymanese subsidiaries six days later, which was not enough time to follow all of the standard procedures by the proposed hearing date.

"Retention applications have not been approved. A second-day hearing has not been held. The debtors have not filed schedules or statements of financial affairs and at their request, have received an extension until January 2025 to file these critical documents. So many “usual” and “customary” acts and orders attendant with mega (and in some instances all chapter 11) cases have not occurred," the DOJ listed.

The filing pointed out that the airline had presented its Chapter 11 plan as a simple "prepackaged case" but had not presented enough evidence to support this claim. The DOJ also underlined that even Spirit's own restructuring support agreement with creditors allows for the plan to be approved by February 17, 2025, rather than in an expedited manner in December 2024.

"Care must be taken at the disclosure statement stage to ensure both accuracy in the information provided and whether 'adequate information' with 'sufficient detail' is in fact provided to the thousands of shareholders, equity holders, creditors, and other interested and voting parties in order to make an 'informed judgement about the plan'," the DOJ further argued.

Given the complexity of the case and the lack of some crucial documents, not all creditors will be able to meaningfully assess the plan by the proposed December 17 hearing.

The filing was entered on December 10, 2024, and judge Sean H Lane has yet to rule on the objection.