1. “Bondholders now have secured debt… $2.1B must be paid from sales of other assets” — Incorrect as stated.
   
   • Secured creditors are paid from their collateral’s value, not automatically from “other assets.” If an asset isn’t in their collateral package, they don’t jump ahead of everyone on it. [url alt="https://www.uscourts.gov/court-programs/bankruptcy/bankruptcy-basics/chapter-11-bankruptcy-basics?utm_source=chatgpt.com"=https://www.uscourts.gov/court-programs/bankruptcy/bankruptcy-basics/chapter-11-bankruptcy-basics?utm_source=chatgpt.com]United States Courts[/url]
     
   • Some Spirit noteholders were already secured pre-petition; there’s no blanket order converting all bond debt into secured claims. (Adequate-protection liens, if granted, don’t turn every bond into a first-priority claim on all assets.)
     
2. “This gets paid before wages” — Wrong (for your paycheck).
   
   • Post-petition wages/benefits are administrative expenses paid currently under the court-approved budget. Cash collateral can be used to fund payroll only with consent/court order and adequate protection for secured parties—but employees still get paid during the case. [url alt="https://www.uscourts.gov/court-programs/bankruptcy/bankruptcy-basics/chapter-11-bankruptcy-basics?utm_source=chatgpt.com"=https://www.uscourts.gov/court-programs/bankruptcy/bankruptcy-basics/chapter-11-bankruptcy-basics?utm_source=chatgpt.com]United States Courts[/url][url alt="https://www.law.cornell.edu/uscode/text/11/503?utm_source=chatgpt.com"=https://www.law.cornell.edu/uscode/text/11/503?utm_source=chatgpt.com]Legal Information Institute[/url]
     
   • Pre-petition wages have priority status (capped) ahead of general unsecured claims. Secured creditors still have first claim on their collateral, but not on everything. [url alt="https://www.law.cornell.edu/uscode/text/11/507?utm_source=chatgpt.com"=https://www.law.cornell.edu/uscode/text/11/507?utm_source=chatgpt.com]Legal Information Institute[/url]
     
3. “Frontier isn’t going to take over Spirit’s liabilities” — Largely correct (in a 363 sale).
   
   • A buyer can purchase assets “free and clear” of most liens/claims under §363(f), choosing which contracts to assume (with cure) and leaving legacy liabilities behind. That’s exactly what 363 is for. [url alt="https://www.goodwinlaw.com/en/insights/publications/2024/05/insights-finance-frg-top-10-questions-about-bankruptcy-sales?utm_source=chatgpt.com"=https://www.goodwinlaw.com/en/insights/publications/2024/05/insights-finance-frg-top-10-questions-about-bankruptcy-sales?utm_source=chatgpt.com]Goodwin[/url][url alt="https://www.mayerbrown.com/en/insights/publications/2025/04/section-363-sales-considerations?utm_source=chatgpt.com"=https://www.mayerbrown.com/en/insights/publications/2025/04/section-363-sales-considerations?utm_source=chatgpt.com]Mayer Brown[/url]
     
4. “…the BK administrator doesn’t ‘wipe out debt’ so another airline gets a sweet deal” — Misstated.
   
   • There’s no “administrator” in Chapter 11; Spirit remains debtor-in-possession. The court can confirm a plan that impairs/equitizes debt or approve free-and-clear sales. Creditors are not guaranteed par; recoveries depend on sale proceeds/plan value and priority. [url alt="https://www.uscourts.gov/court-programs/bankruptcy/bankruptcy-basics/chapter-11-bankruptcy-basics?utm_source=chatgpt.com"=https://www.uscourts.gov/court-programs/bankruptcy/bankruptcy-basics/chapter-11-bankruptcy-basics?utm_source=chatgpt.com]United States Courts[/url][url alt="https://www.law.cornell.edu/uscode/text/11/363?utm_source=chatgpt.com"=https://www.law.cornell.edu/uscode/text/11/363?utm_source=chatgpt.com]Legal Information Institute[/url]
     
5. “The people that loaned money will all get paid” — Usually false.
   
   • In real Chapter 11s, many lenders/bondholders take haircuts or equity; some classes recover less than 100¢, sometimes far less. Secureds can credit-bid to prevent fire-sale pricing, but that still doesn’t ensure par. [url alt="https://www.crowell.com/en/insights/client-alerts/credit-bidding-a-sword-and-a-shield?utm_source=chatgpt.com"=https://www.crowell.com/en/insights/client-alerts/credit-bidding-a-sword-and-a-shield?utm_source=chatgpt.com]Crowell & Moring - Home[/url]
     
6. “Frontier would have to carry a $1B/yr operating loss” — Not how buyers model it.
   
   • In an asset deal, the buyer isn’t buying the old P&L. They take selected aircraft/gates/routes, reject money-losing pieces, and run a new schedule and cost base. Past losses don’t automatically follow them. (That’s the point of 363 and plan tools.) [url alt="https://www.mayerbrown.com/en/insights/publications/2025/04/section-363-sales-considerations?utm_source=chatgpt.com"=https://www.mayerbrown.com/en/insights/publications/2025/04/section-363-sales-considerations?utm_source=chatgpt.com]Mayer Brown[/url]
     

Net takeaway: Losing the GA Telesis cash hurts Spirit’s liquidity/leverage, which can push toward a faster sale timeline—but it doesn’t mean secured bondholders get paid before payroll, nor that creditors must be made whole, nor that Frontier would inherit Spirit’s historical losses. Any buyer would pursue a free-and-clear, selectively assumed asset deal, while creditors push for the highest and best outcome (and can credit-bid if a price is too low).