Judge Sean H Lane has scheduled the hearing on the Spirit Airlines (NK, Fort Lauderdale International) prearranged Chapter 11 restructuring for January 29, 2025, and authorised the airline to begin polling its bondholders regarding their approval of the plan.
In an order issued on December 17, the US Bankruptcy Court for the Southern District of New York judge effectively agreed with the plan previously proposed by the LCC and its four Cayman Islands subsidiaries, whose Chapter 11 cases have been previously joined. Voting claim holders have until January 21 to return the ballots.
Spirit Airlines has said that its restructuring plan is overwhelmingly supported by its bondholders in the prearranged procedure, signalling that it did not expect any issues with securing their approval ahead of the January 29 hearing.
The United States Trustee Program, a part of the DOJ responsible for ensuring bankruptcy processes adhere to the law, previously objected to a request for an expedited hearing, arguing that all parties need more time to review the details of the complex case.
The judge also authorised Spirit and its subsidiaries to enter into previously negotiated backstop agreements and assume backstop payment obligations. "The debtors’ entry into and assumption of the backstop commitment agreement, including the debtors’ agreement to pay each of the backstop obligations, constitutes a reasonable exercise of the debtors’ business judgment," the judge concurred.
Spirit Airlines received backstopped commitments for USD350 million equity investment from bondholders as part of the prearranged restructuring.
Besides the US Trustee, which objected to the hearing date, the process was protested by multiple current shareholders. Spirit Airlines was delisted from the New York Stock Exchange and its entire pre-Chapter 11 equity is expected to be wiped away.
