Originally Posted by
Lincoln Osiris
Yes many have left via liquidation but none of our size. The last airline comparable in size to liquidate was Eastern 33 years ago. In a time of aircraft shortages I think the DOJ would be pretty open to any situation that keep those aircraft here and not sold off to China and Europe.
Just a Point of Order, in a BK filing, the DOJ has no vote.
There would be a creditors committee formed and a new standalone Spirit will have to present a plan in which the creditors will see more value in Spirit continuing vs getting paid out of remaining assets.
Obviously, once they accept a payout, that's it and the rest is lost to the ether. If the creditors accept a reorg, they may have a chance a recovering a larger part of their debts. This is where Sprirt has to wheel and deal to convince the creditors that a NEW Spirit will be profitable and able to cover more of the debt.
A liquidation is always an option the creditors committee could consider. It usually largely comes down to who the major creditors are. If Airbus/Engine makers for instance, they can often see more profit in sustaining a reborn Spirit vs allowing it to be dismantled.
Spirit could persuade the creditors to accept a new merger/acquisition proposal, and that may require a DOJ signoff, but otherwise the DOJ will be on the sideline during BK proceedings.
It's too bad that Sprirt either didn't realize the pickle they were in or decided to obfuscate the truth during the last merger DOJ proceedings, as a powerfull argument could have been made that without this we won't survive which would have allowed the DOJ to accept this as a way to save jobs vs loss of a LCC carrier.