That's the whole point of Ch.11, reorganize and avoid liquidation.

 

I remember a senior captain tell me I was making a mistake leaving in what could have been a good seniority number after the merger . That same captain also recently jumped for a legacy…..

 

Isnt the issue the sept '25 secured bondholders are entitled be paid in full in cash, even in chapter 11?

 

That’s assuming Spirit can navigate through Chapter 11 court. This isn’t a Michael Scott scream declaring “bankruptcy”, plenty of airlines have entered Ch11 and left via liquidation

 

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.

 

I'm not saying it's a good idea stay, especially if you're junior.

Post Ch.11 will probably have a somewhat degraded CBA and possibly more furloughs. Not to mention the intangible of uncertainty waiting for it to all play out.

 

It could have very easily gone the other way though and he would have been right. Mergers that come down to the decision of one man are a complete toss up.

Had it been approved, and it had a decent chance, you would have most likely been better off staying and keeping seniority.

 

I wasnt trying to be funny but I'm glad you got a chuckle out of it.

Always possible.

True, but until the merger closed we would be losing a bunch of quan. I don't see anyone wanting that.

Sorry, I know you interviewed somewhere. You can sub UAL for whatever name you'd like and you'll still have a better chance at a second interview. Sorry, it wasn't a dig at you.

The real point is we won't be bought until we at the very least go through ch11. It's nothing but .02 and worth nothing.

 

It could have easily gone the other way. Congrats on your luck.

 

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.